Kishorkumar Prabhudas Tanna and Another vs State of Gujarat and Others

Rajesh H. Shukla, J.—This group of petitions have been filed by the petitioners for the prayers, inter alia, that a writ of mandamus or a writ in the nature of mandamus or any other appropriate writ, order or direction may be issued directing the respondents to make the earlier exemption granted to the petitioners by the certificates issued by respondent No. 2 under the provisions of the Gujarat Sales Tax Act, 1969 available to the petitioners for the purpose of exemption under the provisions of the Gujarat Value Added Tax Act, 2003 at least for the duration as mentioned in the aforesaid certificate (passed under the Gujarat Sales Tax Act, 1969), if not for more time.

It is also prayed that the respondents may be directed to grant exemption to the industry of the petitioners under the provisions of Gujarat Value Added Tax Act, 2003 from the date of coming into force of the Gujarat Value Added Tax Act, 2003 on the same terms as exemption has been granted earlier under the provisions of Gujarat Sales Tax Act, 1969.

It is also prayed to quash and set aside Notification No. (GHN-27) GST-2006 (Sec. 49) (404)TH dated 31-3-2006 and Notification No. (GHN-27) GST-2006 (Sec. 49) (405) dated 31-3-2006.

It is further prayed that the respondents may be directed to extend the effect of Entry 95 u/s 49(2) and Entry 74 of the Schedule of the Gujarat Sales Tax Act, 1969 to the provisions of Gujarat Value Added Tax Act, 2003 from the date of coming into force of the Gujarat Value Added Tax Act, 2003.

It is also prayed that the respondents may be directed to refund the tax paid or payable by the petitioners for the purchase of goods and remit the tax paid or payable by the petitioners on sale of goods with effect from coming into force of the Gujarat Value Added Tax Act, 2003 and also stay the operation and implementation of Notification No. (GHN-27) GST-2006 (Sec. 49) (404)TH dated 31-3-2006 and Notification No. (GHN-27) GST-2006 (Sec. 49) (405) dated 31-3-2006.

The facts of the case, briefly summarized, are as under:

6.1. The petitioner No. 2 in Special Civil Application No. 23720 of 2006 and other petitioners are village industries established for the purpose of availing the benefit of exemptions from sales tax granted under the Gujarat Sales Tax Act, 1969 (hereinafter referred to as ''the Sales Tax Act''). It is averred that the petitioners are entitled to the protection of their fundamental rights guaranteed under the Constitution of India. It is averred that the petitioners are carrying on business of village industries as defined under the Rural Employment Generation Programme (for short ''R.E.G.P.'') as formulated under the Khadi & Village Industries Commission Act, 1956 (for short ''K.V.I.C. Act'') read with the provisions of the Sales Tax Act and the rules made thereunder. The action of the respondents of not continuing and/or granting and/or extending the benefit of tax exemption to the petitioners has been challenged in the present group of petitions inasmuch as the petitioners were enjoying the benefit of sales tax exemption under the Sales Tax Act and when it has been substituted by bringing in force the Gujarat Value Added Tax Act, 2003 (hereinafter referred to as ''the V.A.T. Act''), the said benefit/exemption has been discontinued or withdrawn on various counts elaborately stated in the petition and also dealt with in the submissions made by the learned Counsel for the petitioners.

6.2. It is the case of the petitioners that the action of the respondents of not recognizing the certificate of exemption granted by respondent No. 2 under the erstwhile Sales Tax Act for the purpose of exemption under the V.A.T. Act in spite of the fact that there is a provision in the latter act (V.A.T. Act) to the effect that the aforesaid certificate granted under the Sales Tax Act would continue to remain valid for the purpose of V.A.T. Act. For that purpose, the petitioners have brought on record the action of the respondents in issuing the Notifications dated 31-3-2006 by which such exemption has been withdrawn, which is produced at Annexure-I. By the impugned notifications under the purported exercise of power u/s 49(2) of the Sales Tax Act read with Section 21 of the Bombay General Clauses Act, have rescinded all exemptions granted previously u/s 49(2) of the Sales Tax Act including the exemption granted to the petitioners.

6.3. Therefore, it has been challenged in the present group of petitions contending, inter alia, that such action is arbitrary and ultra vires the Constitution of India and also ultra vires the provisions of the Sales Tax Act and also it is against the Directive Principles of the State Policy as enshrined in the Constitution of India. It is also challenged on the ground of arbitrariness, discrimination and principles of promissory estoppel. It has been contended that some of the village industries have been extended the exemption by various notifications which includes the units under the khadi industries and village industries for the purpose of V.A.T. Act and the petitioners are denied the same benefit though they are on the same footing and fall within the same homogeneous class. Therefore, it has been contended that the impugned action of the respondents is discriminatory and violative of the mandate of the Constitution of India and the impugned notifications, which have been issued withdrawing/rescinding the exemption granted under the Sales Tax Act, is arbitrary and illegal.

6.4. It has been contended that at least the notifications which have been issued under the erstwhile Sales Tax Act would remain in operation till the expiry of the date or the period as the same cannot be rescinded once, on the basis of such promise of benefit of exemption under the Sales Tax Act, the petitioners have relied upon and acted on it, and therefore, the respondents are also not entitled to rescind or withdraw such benefit on the principle of promissory estoppel. It is contended that the petitioners who are similarly situated, are therefore, challenging the impugned action of rescinding or withdrawal of the benefit granted under the Sales Tax Act and in fact it ought to have been extended or continued under the V.A.T. Act on the same footing like other industries under the khadi or village industries and such action is therefore challenged on the ground of promissory estoppel and legitimate expectation.

6.5. It is averred that the industry of the petitioners is a village industry recognized by the Khadi and Village Industries Commission (for short ''K.V.I.C.'') of which recognization has been issued, which have been produced on record. K.V.I.C. is a statutory body created under the K.V.I.C. Act for the purpose of promoting and developing khadi and village industries. The said functions of K.V.I.C. are under the administrative control of the Ministry of Agro & Rural Industry, Government of India. It is averred that the aforesaid K.V.I.C. is based on Gandhian philosophy of providing work to all stating that Gandhiji had anticipated a complimentary relationship between khadi and village industries.

6.6. Therefore, one of the main programmes of K.V.I.C. is R.E.G.P. for which the scheme has been framed, which has been set out in detail with the objectives in the memo of petition. The Ministry of Argo & Rural Industries, Government of India, has therefore, launched R.E.G.P. through O.C.K.V.I. with the broad objectives which have been also set out in the petition as reproduced hereinafter:

To generate employment in rural areas.

To develop entrepreneurial skill among the rural unemployed youth.

To achieve the goal of rural industrialization.

To facilitate participation of financial institutions for higher credit to rural industries.

6.7. As enumerated and dealt with in detail, the basic objective of the scheme provides that 25% of the project cost up to Rs. 10 lakhs will be provided as "Margin Money", i.e., subsidy. For project cost between Rs. 10 lakhs to Rs. 25 lakhs 25% of Rs. 10 lakhs plus 10% of the balance. Project cost beyond Rs. 25 lakhs was not eligible under the said scheme. Various sections of the village population, particularly, S.C., S.T., O.B.C., women, physically handicapped, ex-servicemen were entitled to above benefit on a higher scale and the scheme was made applicable to all viable village industries projects except negative list stated in the scheme. There is a provision in the general category for extending such benefit. The scheme has been produced at Annexure-B to Special Civil Application No. 23720 of 2006.

6.8. It is also stated that the development of village industries is also an activity to be carried out by the respondents in furtherance of the Directive Principles of State Policy enshrined in the Constitution of India which speak of the efforts to be made by the respondents to minimize inequality in income and facilitate opportunities amongst individuals as well as groups residing in different areas. This will provide the citizens right of adequate means of livelihood and in turn it would avoid concentration of wealth and promote rural employment, and ultimately, it would promote not only cottage industries but it would also promote economic interest of the weaker sections of the country as a whole.

6.9. It is, therefore, contended that the K.V.I.C. Act and Gujarat Khadi & Village Industries Act, 2006 as well as the Directive Principles of State Policy clearly envisage that the policy of the respondents is to encourage such village industries in the rural areas, like the one carried out by the petitioners.

6.10. It is therefore averred that village industries like the petitioners have enjoyed exemptions from sales tax for more than 40 years as incentive offered by the Government as and by way of encouragement for setting up such industries in villages or rural areas. It is also averred that the petitioners, on the basis of the promise of the respondents of granting exemption of sales tax, was one of the main reason which persuaded them and other village people to take up such activity of setting up industries in far-flung village or rural areas, which otherwise lack adequate infrastructure, qualified manpower, etc. However, the Sales Tax Act was substituted with V.A.T. Act which are both essentially enacted for the same purpose, i.e., levy and collection of tax in respect of sale or purchase of goods. It is averred that the underlying policy and principles of both the legislations essentially remain the same and what has changed is simply the method of computation and collection of tax on sale or purchase of goods.

6.11. It is therefore contended that the policy of grant of exemption and its continuance thereof could not have changed with the coming into force of V.A.T. Act. It is also contended that the aforesaid position is further fortified by reading Section 100 of the V.A.T. Act, which is a repeal and saving clause. It is required to be mentioned that Section 100 of V.A.T. Act, referring to the repeal and saving clause, has been much emphasized contending that as per this provision of the V.A.T. Act, the benefits which have been extended under the Sales Tax Act and the certificate and the notifications/orders issued under the Sales Tax Act would also continue to remain in effect. It has been further emphasized that the aforesaid proposition is supported by the fact that the Sales Tax Act is actually defined as "earlier law" in Section 2(12) of the V.A.T. Act.

6.12. Further, it has been contended that under the Sales Tax Act, the petitioners were granted exemption under two Sections, Section 5 as well as Section 49. Various notifications were issued under the aforesaid two Sections of the Sales Tax Act for extending benefit of exemption. It is also contended that the exemption granted u/s 5 of the Sales Tax Act was originally under Entry 35 of the Schedule to the Sales Tax Act which was subsequently amended to Entry 74 of the Schedule to the Sales Tax Act, which has been produced on record. It is also contended that the petitioners were also given protection vide notification u/s 49(2) of the Sales Tax Act and the said protection has been given vide Entry 95 which has been inserted in the list of entries referred in Section 49(2), which is also produced on record. Therefore, it has been contended that the respondents had, vide the impugned notifications dated 31-3-2006, cancelled all earlier exemptions and entries granted u/s 49(2) of the Sales Tax Act before the V.A.T. Act came into force. The said notifications are also produced on record.

6.13. It is contended that the benefit of exemption under the Sales Tax Act would remain and continue when the V.A.T. Act came into force on the next date, i.e., 1-4-2006. It has been contended that the effect of coming into force of the aforesaid Act has been that the Sales Tax Act stood repealed. However, Section 100 of the V.A.T. Act, which refers to repeal and saving clause, will have application.

6.14. Further, it has been also contended that Section 5 of the V.A.T. Act contained a provision for granting exemption and the earlier exemption granted to khadi industries was continued under the V.A.T. Act for which reference has been made to Entry 36B of Schedule I of V.A.T. Act, which is also produced on record at Annexure-J in Spl.C.A. No. 23720 of 2006. It is further contended that the respondent No. 4, in exercise of power conferred by Sub-section (2) of Section 5 of V.A.T. Act, continued the tax exemptions granted to sale or purchase of goods by the industrial units or the deferment of tax to such industrial units under the ''earlier law'' though the petitioners have been meted out a different treatment, which is the bone of contention. Therefore, it has been contended that though the petitioners are similarly situated like other industrial units or khadi industries to whom the benefits have been extended in one form or other regarding exemption from payment of tax and/or applicability of V.A.T. Act, the petitioners have been meted out a different treatment, and therefore, the impugned action and the notifications are arbitrary, discriminatory and also in violation of the Directive Principles of the State Policy and the Constitution of India.

6.15. A reference has been made to the representations made to various authorities including the representation made by the petitioners through Mahagujarat Gramodyog Mahasangh for extending the benefit given to them under the erstwhile Sales Tax Act. However, such representations have been ignored by the respondents. It is also averred that the office of Commissioner of Khadi & Village Industries has also recommended for exemptions to the village industries like the petitioners as it would fall within the purview of K.V.I.C. However, the same has also been ignored and the impugned notifications came to be issued, which have been challenged in the present group of petitions on various grounds as set out in detail in the petitions, briefly summarized hereinabove.

6.16. An affidavit-in-reply has been filed on behalf of respondent No. 1 by the Addl. Secretary, Finance Deptt., contending, inter alia, that the petitioners have established the concerned village industries for getting the exemption of sales tax under the Sales Tax Act. However, it is denied that the respondents have held out any promise or representation as alleged and it has been denied that the petitioners have set up their industries on the basis of any purported promise or representation regarding grant of exemption to the industries as alleged. It is also contended that a reference could be made to the relevant enactments/laws and the R.E.G.P. for its proper meaning and interpretation.

6.17. It is contended that the broad objective of the R.E.G.P. floated by the Ministry of Agro & Rural Industries, Government of India, was to generate employment in rural areas, to develop entrepreneurial skills among the rural unemployed and also to facilitate participation of the village population for the purpose of employment and also other goals. It has referred to the broad outline of the schemes as to how it would work out extending the benefit and it has been specifically contended that as per the policy of R.E.G.P. subsidy for margin money to the tune of approximately Rs. 2.81 lakhs has already been received by the petitioners in Special Civil Application No. 23720 of 2006 in setting up the unit and similarly such benefit has been availed by the other petitioners.

6.18. It has been, therefore, contended that the benefits under the R.E.G.P. have already been ensued in favour of the petitioners and they have availed of the same. It is also contended that the benefits or exemption granted u/s 49 of the Sales Tax Act can always be withdrawn and the Government is entitled to modify or withdraw any such exemption. It is, therefore, contended that Section 49 of the Sales Tax Act empowers the State Government to rescind or modify such exemption subject to the condition that the same has to be published in the Official Gazette.

6.19. It is denied that sales tax as well as V.A.T. are essentially the same. It is contended that the V.A.T. is a multi point sales tax and is collected on value addition only at each stage. The input tax credit accumulated from the previous stage is adjusted against the output tax paid in the return period. The sales tax is collected at one single stage of purchase or sale of goods while V.A.T. is a multi point taxation system. Further, under the V.A.T. there is a provision for set off of previously paid tax by allowing the adjustment of input tax credit. Therefore, under sales tax only one dealer, either the first or the last, bears the whole burden of tax, while under V.A.T. all dealers from first seller to last seller would share the burden of tax. It is contended that there is no policy of exemption as contended by the petitioners. However, the scheme of V.A.T. contemplate refund of tax and remission of tax as provided under the V.A.T. Act, which is different from the Sales Tax Act. It is contended that the provision of Section 100 of the V.A.T. Act does not apply to the facts of the present case, which is a repeal and saving clause, and such an interpretation, as sought to be canvassed by the petitioners, would render the provision of Section 5(2)(b) of V.A.T. Act redundant. It is also contended that the petitioners are not entitled to claim continuation of exemption granted under the Sales Tax Act even after coming into force of V.A.T. Act or the certificate of the petitioners can be construed to have been valid or in force after the V.A.T. has been brought into force. It is denied that exemption granted to the petitioners under the erstwhile Sales Tax Act would continue to be valid under the V.A.T. Act as alleged. It is denied that the certificate of exemption granted or issued to the petitioners are valid or operative even under the V.A.T. Act as alleged. It is contended that the exemption has been granted under the relevant provisions of the Sales Tax Act and it is well established that the Government has the power to rescind, amend or annul such notifications which would therefore not amount to a representation at all.

6.20. It is contended that the petitioners have not taken any action pursuant to any representation or promise, and therefore, the petitioners are not entitled to invoke the doctrine of promissory estoppel or legitimate expectation. It is therefore contended that the claim of the petitioners based on the doctrine of promissory estoppel is misconceived because the exemptions have been rendered ineffective because of the enactment by the legislature in the form of the new act, i.e., the V.A.T. Act, which has repealed the earlier Sales tax Act under which the exemptions were granted to the petitioners. It is, therefore, contended that the question of applying the doctrine of promissory estoppel or legitimate expectation does not arise. It is denied that the representation of the petitioners have been ignored as alleged.

6.21. It is contended that under the provisions of V.A.T. Act, the respondent No. 1 had set up a high powered cabinet sub-committee and the said committee has considered number of issues arising under the V.A.T. Act including the advisability of continuing exemptions granted under the Sales Tax Act as well as regarding granting refund/remission under the V.A.T. Act. The committee took into account the relevant facts and material, the scheme and provisions of the V.A.T. Act and also considered visit reports of various aspects including the necessity of providing impetus to village industries after considering the development and potential of various activities undertaken by such industries. It was recommended not to extend the exemptions granted under the Sales Tax Act to all village industries and looking to the aforesaid factors and provisions of the V.A.T. Act only certain industrial activities as specified in the Notifications dated 18-8-2006 were considered and recommended for the purpose.

6.22. Thus, while determining the aforesaid issues, the committee also considered the revenue implications as against the public purpose which is likely to be achieved by the exemptions/incentives, and thereafter, in public interest, recommended that such incentives should be granted to industries or undertaking only in selected/specified activities.

6.23. It is, therefore, contended that the grant of incentives or benefits under a taxing statute is in the realm of policy of the State and the question of discrimination does not arise at all. It is therefore contended that the petitioners cannot claim parity because of purported similar treatment under an earlier enactment to other industries and similarly the contention regarding discrimination are also denied.

Heard learned Sr. Counsel Mr. S. N. Shelat with learned Advocate Mr. Mehd appearing for the petitioners.

7.1. Learned Sr. Counsel Mr. Shelat submitted, referring to the pleadings, that the issue refers to the aspect of withdrawal of the benefit granted by the Government vide Government Notifications dated 31-3-2006 and the interpretation of the provisions of the erstwhile Sales Tax Act, which has been replaced by the V.A.T. Act. He further emphasized that it will have to be considered in light of the principles regarding promissory estoppel and Articles 14, 19 etc. of the Constitution of India.

7.2. Learned Sr. Counsel Mr. Shelat, for that purpose, referred to the Government Resolution dated 4-4-2006 by which the Gujarat Khadi and Village Industries Act, 2006 has been enacted, and referring to the definition of ''village industry'' at 2(g), he emphasized the basic idea and the purpose of the said Act. Similarly, the learned Sr. Counsel has also referred to the ''rural area'' which has been referred to in Clause (2) of the Explanation.

7.3. Learned Sr. Counsel Mr. Shelat submitted that the petitioners established an industry in village Harshadpur, Jamnagar District, and the capital investment made by the petitioner is Rs. 50,000/- per worker as per the requirement and total 14 employees are employed by the petitioners (in case of Spl.C.A. No. 23720 of 2006). The certificate of registration dated 21-12-2005 has been granted which is at Annexure-A and the certificate of exemption from the sales tax at Annexure-G. He emphasized, referring to this certificate, that the certificate is granted under Entry 74 of Schedule I of the Sales Tax Act and the conditions specifically provided that the certificate shall be effective from 1-12-2005 to 30-11-2008. It also provides that sale by holder of such certificate or the product of village industries and/or sale of khadi etc. mentioned in the list shall be exempt from tax and also such sales by the dealer of these products purchased from the holder of this certificate shall be exempt from the tax. Learned Sr. Counsel Mr. Shelat submitted that, but for this concession granted, it would have been difficult to set up such an industry.

7.4. Learned Sr. Counsel Mr. Shelat, therefore, submitted that it is only because of such policy and the promise held out by the Government that the industries of the petitioners would be exempt from sales tax, they were set up and the element of tax was never counted as a part of the cost of the projects. It was submitted and emphasized that the petitioners cannot meet with the competition with other industries. It is on the basis of such policy and the promise held out by the Government regarding exemption from the sales tax that the petitioners had set up the industries.

7.5. Learned Sr. Counsel Mr. Shelat, therefore, submitted that, as it is evident from the certificate at Annexure-G regarding exemption from the sales tax, it would be effective till 30-11-2008 and the present petitioners are exempted from the payment of sales tax till then. It was therefore emphasized and submitted that once the exemption has been granted till a particular period, it could not have been cancelled or withdrawn. Learned Sr. Counsel Mr. Shelat referred to Annexure-D at p. 105 and submitted, referring to the Entry at S1. No. 35 and 74, and emphasized that Entry 74 clearly provide, "products of village industries as defined in the Khadi and Village Industries Commission Act, 1956". Therefore, the exemption has been granted as per the provisions of the Sales Tax Act.

7.6. Learned Sr. Counsel Mr. Shelat referred to Section 5 of the Sales Tax Act. This Section provides for ''sales and purchase of certain goods free from all taxes''. Sub-section (2) of Section 5 provide,

The State Government may, by notification in the Official Gazette add to, or enlarge, any entry in Schedule I, or relax or omit any condition or exception specified therein; and thereupon, the said Schedule shall be deemed to be amended accordingly.

He also referred to Section 49 of the Sales Tax Act, which refers to the exemptions. Sub-section (2) of Section 49 provide,

Subject to such conditions as it may impose, the State Government may, if it considers it necessary so to do in the public interest, by notification in the Official Gazette, (exempt any specified class of sales or of specified sales or of purchases) from payment of the whole or any part of (the tax) payable under the provisions of this Act.

7.7. Therefore, learned Sr. Counsel Mr. Shelat submitted that the exemption from the payment of sales tax has been granted as per Entry 74 of Schedule I to the Sales Tax Act in exercise of powers under the Sales Tax Act referred to hereinabove. However, he referred to the Government Notifications dated 31-3-2006 at Annexure-I and submitted that by these notifications, the Government is empowered u/s 49(2) of the Sales Tax Act read with Section 21 of the Bombay General Clauses Act to rescind the earlier Government Notifications and pursuant to such exercise of power, the earlier Notifications dated 29-4-1970 and 1-4-1992 have been rescinded. He referred, again to Notifications at Annexure-I and also Annexure-J regarding the exemption granted under the V.A.T. Act. He also referred to page 138 and referred to the Notifications dated 31-3-2006 issued under the V.A.T. Act which also provide for the exemptions in exercise of powers u/s 5 of the V.A.T. Act.

7.8. However, the exemption which has been granted as per the earlier Notification dated 1-4-1992 granted to the petitioners, which was to remain effective till November, 2008, has been withdrawn, which is the bone of contention.

7.9 Learned Sr. Counsel Mr. Shelat submitted that the moot question which is required to be considered is that when the V.A.T. Act was brought into force in place of the erstwhile Sales Tax Act, can the Government withdraw the exemptions which have been granted under the erstwhile Sales Tax Act for a definite period, that is, from 1-12-2005 to 30-11-2008? Learned Sr. Counsel Mr. Shelat submitted that, in fact, Section 100 of the V.A.T. Act, which is a repeal and saving clause, would apply, and emphasizing on Section 100 of the V.A.T. Act, it was strenuously submitted by him that the benefit which was granted under the erstwhile Sales Tax Act would be saved and he further emphasized that the repeal of the erstwhile Sales Tax Act shall not affect the operation of the said Act or any right, title, obligation or liability already acquired or accrued or incurred thereunder. He also emphasized that, similarly, any action, including the notification issued under the erstwhile Sales Tax Act, in exercise of powers under the said Act (Sales Tax Act), would be saved as if such powers have been exercised under the V.A.T. Act and as if it was in force.

7.10. He, therefore, strenuously submitted that Section 100 of the V.A.T. Act, which is referring to the repeal and saving clause, is a complete answer to the arbitrary action of the Government inasmuch as the V.A.T. Act, which has replaced the erstwhile Sales Tax Act, in Section 100 providing for the repeal and saving clause clearly provide for such an eventuality. Learned Sr. Counsel Mr. Shelat strenuously submitted that the Legislature was conscious, and therefore, it has in detail provided for the aspect of the right, title, obligation or the liability under the erstwhile Sales Tax Act and has also referred to the notice issued in exercise of powers under the erstwhile Sales Tax Act.

7.11. Therefore, learned Sr. Counsel submitted that it cannot be said that what the petitioners are claiming is illegal or they are claiming a fresh benefit under the newly enacted V.A.T. Act, which has replaced the erstwhile Sales Tax Act, which also has the power of exemption. He further submitted that, therefore, the benefit or concession which has been granted under the Sales Tax Act, which has been repealed and replaced by the V.A.T. Act, would remain in force, particularly when there is a specific notification issued in favour of the petitioners at Annexure-L which provide that such an exemption granted in exercise of power under the Sales Tax Act would remain in force till Nov. 2008 could not have been cancelled or rescinded or withdrawn when the newly enacted V.A.T. Act has been brought into force. He emphasized that the new V.A.T. Act, which has replaced the earlier Sales Tax Act, has also a power of granting exemption.

7.12. Therefore, learned Sr. Counsel Mr. Shelat submitted that if a benefit of exemption is granted under the previous law, can the party claim the same exemption under the new or the substituted law? He also emphasized that there is a similar power of granting exemption under the V.A.T. Act, but the exemptions qua the petitioners have been withdrawn, and therefore, the moot question before the Court is whether such a withdrawal of the benefit of exemption from the tax under the previous law could be valid when it has been replaced by the newly enacted V.A.T. Act, which again has a provision for grant of exemptions.

7.13. This issue also requires to be considered with reference to Section 100 of the newly enacted V.A.T. Act, which has reference to the repeal and saving clause, and as submitted above, clearly provide for the right, title, interest acquired or accrued and also the notification issued under the erstwhile Sales Tax Act. Learned Sr. Counsel Mr. Shelat also emphasized and submitted that it will also have to be considered in light of the doctrine of promissory estoppel.

7.14. Learned Sr. Counsel Mr. Shelat also referred to the provisions of K.V.I.C. Act. He also referred to the Government Notification dated 1-4-2006 issued under the V.A.T. Act at Annexure-L at page 140 and emphasized that it clearly provides that

the Government of Gujarat continues the tax exemptions granted to the sales or purchases of goods industrial units or the deferment of tax to such industrial units under the earlier law and to whom the Eligibility Certificate has been granted by the Industries Commissioner and the exemption certificate granted by the Commissioner of Sales Tax, subject to the provisions of Chapter IV-A of the Gujarat Value Added Tax Rules, 2006.

Therefore, emphasizing on this aspect and referring to another Government Notification dated 18-8-2006 at Annexure-M, he submitted that it also refers to the exemptions granted under the newly enacted V.A.T. Act and the condition of eligibility provide,

A registered dealer who is a manufacturer of goods in the industries specified in the annexure appended to this notification and who has obtained the Eligibility Certificate prior to the 1st April, 2006 from the Khadi and Village Industries Commission or Gujarat Rajya Khadi and Gramodyog Board (hereinafter referred to as ''the appropriate authority'') and the Exemption Certificate from the Commissioner under the provisions of earlier law.

7.15. Therefore, learned Sr. Counsel Mr. Shelat emphasized that even the newly enacted V.A.T. Act also refers to exemptions to the manufacturers or the industries under the K.V.I.C. Act as per the certificate issued by the Khadi and Village Industries Commission. Learned Sr. Counsel Mr. Shelat submitted that it would show that in exercise of power under the newly substituted V.A.T. Act, the State Government has continued the exemptions granted under the old Sales Tax Act and it would imply that the petitioners can claim the same benefit as there is a power to grant exemptions under the new law. However, the respondent-State Government has, in spite of such power of exemptions under the newly substituted V.A.T. Act, has exercised its power, by adopting a policy of pick and choose, denying similar benefits or treatment to the petitioners, which is the bone of contention or grievance.

7.16. Learned Sr. Counsel Mr. Shelat emphasized that once the Legislature has granted an exemption under an earlier Act, which has been repealed when the newly substituted law has come into force and the repealed provision as well as the new Act clearly provide for exercise of power of granting exemption and which have been also exercised in some cases, then, can persons like the petitioners, in whose favour there is already an exemption or the certificate granting exemption for a particular period, could be cancelled or withdrawn even before expiry of the period?

7.17. Learned Sr. Counsel Mr. Shelat, referring to the scheme of both the Sales Tax Act and the V.A.T. Act which was brought into force with effect from 1-4-2006, submitted that the new Act has replaced the erstwhile Sales Tax Act and the definition of ''sale'' is the same in both the Acts. Similarly, the provision for grant of exemption are also there in the newly enacted V.A.T. Act. Therefore, the action of the respondent Government in withdrawing the benefit of exemption from payment of sales tax on enactment of the substituted new V.A.T. Act would not be justified till the expiry of the notification which has been granted in favour of the petitioners under the erstwhile Sales Tax Act which would remain in effect till November, 2008.

7.18. Learned Sr. Counsel Mr. Shelat again referred to Section 100 of the V.A.T. Act, which refers to the repeal and saving clause, and emphasized referring to this provision. It also provides in detail the right, title, interest accrued and also has a reference to the notification issued earlier under the erstwhile Sales Tax Act, and therefore, it was strenuously submitted that the Legislature was conscious about this, and therefore, while enacting the newly substituted V.A.T. Act, in detail, has provided for such repeal and saving clause by Section 100. He further emphasized that it is a complete answer to the contentions raised by the respondent Government and in fact it supports the contentions raised by the petitioners with regard to protection of their benefit or exemption granted under the erstwhile Sales Tax Act pursuant to the notifications under the Sales Tax Act, which would remain effective till the expiry of the period specified in the said notification at Annexure-L.

7.19. Learned Sr. Counsel Mr. Shelat, therefore, referring to Section 100 of the V.A.T. Act as well as Section 6 of the General Clauses Act, emphasized that the right, title, interest accrued pursuant to the notification under the Sales Tax Act cannot be taken away by the newly substituted V.A.T. Act.

7.20. Learned Sr. Counsel Mr. Shelat referred to and relied upon the judgment of the Hon''ble Apex Court in the case of Nar Bahadur Bhandari etc. Vs. State of Sikkim and Others, , and referring to Paras 9 and 16, where a reference is made to the earlier judgment of the Constitution Bench of the Apex Court reported in Bishambar Nath Kohli and Others Vs. State of Uttar Pradesh and Others, , submitted that unless different intention is expressed in a newly substituted law, as provided in Section 6 of the General Clauses Act, the position will remain or apply as it is. He emphasized, quoting Sub-section (2) of Section 30 of the Act of 1988,

Notwithstanding such appeal, but without prejudice to the application of Section 6 of the General Clauses Act, 1897, anything done or any action taken or purported to have been done or taken under or in pursuance of the Acts so repealed shall, insofar as it is not inconsistent with the provisions of this Act, be deemed to have been done or taken under or in pursuance of the corresponding provision of this Act.

Therefore, learned Sr. Counsel Mr. Shelat submitted that while construing and interpreting the repeal and saving clause of the substituted law, unless a different intention is expressed, the Court is required to consider the provisions of the repealing act which again provide for saving of the right, title, interest and also benefits under the notification issued under the erstwhile Sales Tax Act.

7.21. Learned Sr. Counsel Mr. Shelat also referred to the judgment in the case of Gammon India Ltd. Vs. Spl. Chief Secretary and Others, with particular reference to Paras 14, 15, 41, 46, 72, 73 in the judgment. He also referred to the judgment of the Hon''ble Apex Court in the case of MRF Ltd., Kottayam Vs. Assistant Commissioner (Assessment) Sales Tax and Others,

7.22. Learned Sr. Counsel Mr. Shelat also referred to the judgment of the Hon''ble Apex Court in the case of Mahabir Vegetable Oils Pvt. Ltd. and Another Vs. State of Haryana and Others, and emphasized that the doctrine of promissory estoppel even operates in the legislative field. For that purpose, he referred to this judgment and submitted that in that case also the State Government issued notification with retrospective effect omitting Note 2 to Schedule III of the Rules and also amending the rule, thereby disentitling the appellant therein to the benefit of exemption. The doctrine of promissory estoppel was attracted. It has been observed by the Hon''ble Apex Court, to which the learned Sr. Counsel has emphasized, referring to Para 25, as under:

It is beyond any cavil that the doctrine of promissory estoppel operates even in the legislative field. Whereas in England the development and growth of promissory estoppel can be traced from Central London Property Trust Ltd. v. High Trees House Ltd. in India the same can be raced from the decision of this Court in Collector of Bombay v. Municipal Corporation of the City of Bombay. In that case, the Government made a grant of land (which did not fulfill requisite statutory formalities) rent free. It, however, claimed rent after 70 years. The Government, it was opined, could not do so as they were estopped. It was further held therein that there was no overriding public interest which would make it inequitable to enforce estoppel against the State as it was well within the power of the State to grant such exemption.

7.23. Learned Sr. Counsel Mr. Shelat also referred to the observations made in this judgment, referring to the earlier judgment in the case of Motilal Padampat Sugar Mills Co. Ltd. Vs. State of Uttar Pradesh and Others, and also in the case of Pournami Oil Mills and Others Vs. State of Kerala and Another, . Mr. Shelat, learned Sr. Counsel, referring to these observations, submitted that the doctrine of promissory estoppel would be applicable in the facts of the present cases.

7.24. Learned Sr. Counsel Mr. Shelat referred to and relied upon the judgment of the Hon''ble Apex Court in the case of U.P. Power Corporation Ltd. and Another Vs. Sant Steels and Alloys (P) Ltd. and Others, . Referring to Para 18 of the said judgment, the learned Sr. Counsel has submitted that the doctrine of promissory estoppel would attract because the notification issued u/s 49(2) of the Sales Tax Act granting benefit of exemption was in the nature of delegated legislation.

7.25. Learned Sr. Counsel Mr. Shelat also referred to and relied upon the judgment of the Hon''ble Apex Court Motilal Padampat Sugar Mills Co. Ltd. (supra), and referring to the aspect of promissory estoppel, it was submitted that the Hon''ble Apex Court has considered the doctrine of promissory estoppel whether the State is bound, and if it is bound, to what extent it will apply and it has been observed,

It is an equitable principle evolved by the Courts for doing justice and there is no reason why it should be given only a limited application by way of defence. There is no reason in logic or principle why promissory estoppel should also not be available as a cause of action, if necessary to satisfy the equity. It is not necessary, in order to attract the applicability of the doctrine of promissory estoppel, that the promisee, acting in reliance on the promise, should suffer any detriment. What is necessary is only that the promisee should have altered his position in reliance on the promise. But if by detriment we mean injustice to the promisee which would result if the promise were to recede from his promise, then detriment would certainly come in as a necessary ingredient....

It has been further observed,

The doctrine of promissory estoppel has also been applicable against the Government and the defense based on executive necessity has been categorically negatived. When the Government makes a promise knowing or intending that it would be acted on by the promisee and, in fact, the promisee, acting in reliance on it, alters his position, the Government would be held bound by the promise and the promise would be enforceable against the Government at the instance of the promisee, notwithstanding that there is no consideration for the promise and the promise is not recorded in the form of a formal contract as required by Article 299 of the Constitution.

7.26. Therefore, learned Sr. Counsel Mr. Shelat submitted that the submissions made or the contentions raised regarding applicability or attracting the doctrine of promissory estoppel itself is misconceived. The Government cannot deny the benefit of exemption on the ground that it is a policy matter or it is a discretion to be exercised under the statute, and therefore, either it is a legislative intention or it is a policy matter, and therefore, it will be outside the purview of judicial review and/or doctrine of promissory estoppel.

7.27. Mr. Shelat, learned Sr. Counsel, referring to the judgment of the Hon''ble Apex Court in the case of U.P. Power Corporation (supra), submitted that consistently the doctrine of promissory estoppel has been held to be applicable. He also emphasized the observations made in this judgment which has more or less similar facts with regard to grant of benefit by way of delegated legislation in the form of notification and the revocation thereof.

7.28. Again, learned Sr. Counsel Mr. Shelat referred to the judgment in the case of Bannari Amman Sugars Ltd. v. Commercial Tax Officer reported in 2004 Lawsuit 1382 (SC), and submitted, as observed in Para 9, that even though there may be a discretion to change the policy it has to be examined in light of Article 14. Mr. Shelat, learned Sr. Counsel, emphasized the observation,

The wide sweep of Article 14 and the requirement of every State action qualifying for its validity on this touchstone irrespective of the field of activity of the State is an accepted tenet. The basic requirement of Article 14 is fairness in action by the State, and non-arbitrariness in essence and substance is the heart-beat of fair-play.

Learned Sr. Counsel Mr. Shelat submitted that in this case also, the arguments regarding the applicability of promissory estoppel were negatived when the benefit of exemption granted was sought to be withdrawn and such an action was examined by the Hon''ble Apex Court invoking the principle of promissory estoppel.

7.29. Mr. Shelat, learned Sr. Counsel, submitted that in the facts of this case also, the benefit of exemption which was already granted were sought to be withdrawn, which has been challenged. The learned Sr. Counsel also submitted that the benefit was sought to be withdrawn without giving an opportunity of hearing, and in the facts of the case reported in Bannari Amman Sugars Ltd. (supra) case also, even on that count, it was examined referring to Article 14 of the Constitution of India. Learned Sr. Counsel Mr. Shelat also referred to the observations made in Para 15 of the said judgment referring to the doctrine of legitimate expectation also as under:

If a denial of legitimate expectation in a given case amounts to denial of right guaranteed or is arbitrary, discriminatory, unfair or biased, gross abuse of power or violation of principles of natural justice, the same can be questioned on the well known grounds attracting Article 14, but a claim based on mere legitimate expectation without anything more cannot ipso facto give a right to invoke these principles.

7.30. In the facts of the present case, learned Sr. Counsel Mr. Shelat, referring to the details in the pleadings emphasized that the petitioners, which are small units, are denied the benefit whereas the persons similarly situated and the companies for which the details are also referred at length in the pleadings, are granted the benefit of exemption, which is arbitrary and discriminatory. He submitted that the object and purpose of the K.V.I.C. Act was to promote industries in villages in order to provide employment and self-reliance to the rural masses and units like the petitioners who were given a promise of exemption from the sales tax are subsequently denied such benefit and under the guise of some other policy other bigger commercial units are sought to be given the benefits would itself satisfy the claim or submission regarding the arbitrary and discriminatory treatment by the Government.

7.31. Therefore, learned Sr. Counsel, again referring to the provisions of the V.A.T. Act, submitted that this Court is not required to legislate or consider legislative aspect as the provision is already there in the newly substituted V.A.T. Act and the discretion or power for granting exemption are also exercised but it has been exercised by following the policy of pick and choose denying the right or the benefit of exemption already granted to the petitioners, which is arbitrary and illegal. He emphasized that the benefit which has been granted under the erstwhile Sales Tax Act to the petitioners have been sought to be rescinded by issuing notifications in exercise of power under the said Act and thereafter exemption under the newly enacted V.A.T. Act has been granted to selected units, and though the notification is issued under the V.A.T. Act for grant of exemption from payment of tax, the entries in the Schedule omits a number of industries or units like the petitioners, and thereby, denied such a benefit or equal treatment, which is arbitrary and illegal, which is sought to be challenged in these petitions.

Learned Counsel Mr. J. P. Shah appearing with learned Advocate Mr. Manish Shah for the petitioners in Special Civil Application Nos. 19723 to 19727 of 2006 submitted that in a fiscal law even if the law is substituted by another law, what has been done is not totally done away with, and therefore, with the experience and necessity, the repeal and saving provision has been evolved, which has been incorporated in the newly substituted law. He, therefore, referred to Section 100 of the newly substituted V.A.T. Act and submitted that it has been so elaborately drafted which takes care of the acts done under the prevalent Sales Tax Act. He therefore supported the contentions raised by learned Sr. Counsel Mr. Shelat that Section 100 of the V.A.T. Act is a complete answer to the contentions raised.

8.1. Learned Counsel Mr. Shah also referred to the K.V.I.C. Act and the scheme and submitted that as referred to in the pleadings, the basic purpose or object of such an Act was to promote industries in rural areas which in turn would have the effect of promoting local areas which is in consonance with the Directive Principles of State Policy enshrined in the Constitution. It is for achieving such purpose, the benefit of exemption of the schemes are made and the notification dated 1-4-2006 granting exemption from the sales tax has been issued which is at Annexure-L.

8.2. Learned Counsel Mr. Shah, therefore, submitted that the submissions made by the learned Government Pleader referring to the legislative domain and the policy matter and also the scope of judicial review have to be considered in background of the factual scenario and the fact that the K.V.I.C. Act itself is enacted for promotion of such policy or the schemes of the Government, and therefore, once the benefit of exemption is granted under the statute i.e., the Sales Tax Act, it cannot be curtailed or rescinded before the expiry of the period it was valid, even if a new legislation is brought into force. Therefore, learned Counsel Mr. Shah submitted that there is no doubt that the notification or the certificate granting exemption has been issued under the Sales Tax Act, which has been repealed, and once the Act has been repealed, it cannot be argued that whatever has been done would be swept away, more particularly when there is a repeal and saving clause provided in the newly substituted V.A.T. Act in the form of Section 100, which has been elaborately worded. He again emphasized, referring to Section 100 of the V.A.T. Act, that it takes care of the rights accrued and also the notification issued under the earlier Sales Tax Act. For that purpose, he referred to the pleadings and emphasized referring to pp. 140-148 and also Section 100 of the V.A.T. Act that if the argument of the other side has to be accepted, then Section 100 of the newly substituted V.A.T. Act would become redundant, as otherwise, it will not have any meaning. Learned Counsel Mr. Shah also submitted that such benefit which has been extended, and on the basis thereof the industries like the petitioners have relied upon, the same cannot be withdrawn or rescinded and any such action would be arbitrary, illegal and would attract the doctrine of promissory estoppel.

8.3. Learned Counsel Mr. Shah, referring to the evolution of the concept and doctrine of promissory estoppel, referred to and relied upon the judgment of the Hon''ble Apex Court in the case of Union of India and Ors. v. Anglo Afghan Agencies reported in AIR 1968 SC 718, and he extensively referred to the observations made therein and submitted that this very principle has been gradually developed and accepted and it has been also fully accepted till recently. For that purpose, he referred to the judgment in Khazanchand Nathiram''s case 2004 (136) STC 261. Learned Counsel Mr. Shah referring to the judgment in the case of Bannari Amman Sugars Ltd. (supra) submitted that this doctrine is applicable even in the legislative field to which he again referred extensively, which has been referred to earlier, and therefore, it is not being extensively referred to here. He has also referred to the judgment in the case of Motilal Padampat Sugar Mills Co. Ltd. (supra) and also in the case of Mahabir Vegetable Oils Pvt. Ltd. (supra).

Mr. Sunit Shah, learned Government Pleader, at the outset submitted that he would summarize, broadly, the points before elaborating them further.

9.1. For that purpose, he submitted that the submissions made by the learned Advocates for the petitioners are that the rights are accrued in favour of the petitioners by virtue of Entry 95 made in exercise of power u/s 49(2) of the Sales Tax Act and the same can never be withdrawn or it should remain perpetual.

9.2. For that purpose, learned Government Pleader Mr. Shah submitted that the submissions are two-fold that while introducing the V.A.T. Act the erstwhile Sales Tax Act has been repealed, and therefore, the repealed Act has to be considered as if it never existed and whatever the benefit of exemptions are granted would be treated to have gone with the repealed Act. Further, before the repeal of the Sales Tax Act in exercise of the same power u/s 49(2) of the Sales Tax Act if the exemptions are withdrawn, whether the Court can restrain in exercise of the legislative function from rescinding the notification? Whether the principles of promissory estoppel are to be attracted and applicable to the facts of the case wherein he has emphasized that it is a legislative function? Where the discretion under the V.A.T. Act for grant of exemption has not been exercised for the items relating to the petitioners, can the Court examine and grant any relief?

9.3. Learned Government Pleader Mr. Shah referred to the provisions of Section 100 of the newly substituted V.A.T. Act and emphasized that though it has been submitted that the repeal and saving clause provided by this Section saves the benefit or exemption granted by a notification to the petitioners, it is required to be considered in light of the submissions made and Section 6 of the General Clauses Act, 1897. Learned Government Pleader Mr. Shah submitted that Section 6 of the General Clauses Act would have application if the intention is not expressed otherwise or pointed out, whereas in the facts of the present case, when there is a clear provision for repeal and saving by way of Section 100 of the V.A.T. Act and also a provision for grant of exemption under the said Act, and yet if there is no exemption granted or continued in favour of the petitioners, the intention is required to be inferred as expressed clearly otherwise, and therefore, Section 100 of the V.A.T. Act providing for repeal and saving will not have any application.

9.4. Learned Government Pleader Mr. Shah also referred to the judgments cited by learned Sr. Counsel Mr. Shelat and emphasized the observations made to the effect that it clearly provides that Section 6 of the General Clauses Act would be attracted only if there is no express intention otherwise. Therefore, he emphasized that the language used by the Legislature has to be read and the provision of the statute may be read as a whole and the Court may not read into something which is not provided or may not add anything.

9.5. The learned Government Pleader submitted that while interpreting or construing a statute, particularly a final statute, there is very little scope for judicial review. He also submitted that it is a legislative function, and therefore, it is within the domain of the legislature and the Court may not interfere and even if the legislature is harsh or has not provided for something, it cannot be substituted by the opinion of the Court as it will not be within the domain of the judiciary. He, therefore, emphasized and strenuously submitted that the scope of judicial review is very limited and once it is accepted or established that the law has been made validly by the legislature, the Court has to only interpret, but cannot substitute its opinion.

9.6. Learned Government Pleader Mr. Shah submitted that the submissions have been made on the presumption that notification u/s 49(2) of the erstwhile Sales Tax Act for exemption is continued when the newly substituted V.A.T. Act came into force. However, Mr. Shah, learned Government Pleader, pointedly invited the attention of the Court that before the V.A.T. Act was substituted and was brought into force, the earlier notification issued under the Sales Tax Act was rescinded or cancelled, and thereafter, when the V.A.T. Act came into force, the exemptions have been granted by the legislature considering the policy and the requirements which the Legislature has in its wisdom thought it fit and desirable. Therefore, again, learned Government Pleader Mr. Shah submitted that once the notifications are issued under the V.A.T. Act, it does not cover the similar benefit of exemption, the Court cannot substitute its opinion for grant of such exemption qua the petitioners. Similarly, the benefit of exemption which was granted under the erstwhile Sales Tax Act would stand withdrawn or cancelled with the repeal of the said Act.

9.7. For that purpose, the learned Government Pleader referred to several judgments and strenuously submitted that as it is observed, the repealed Act has to be considered as if it has never existed and newly substituted law or Act has to be interpreted. He submitted that, therefore, the Sales Tax Act, which has been repealed, has to be treated as it has never existed and whatever the benefit or exemption is deemed to have gone with the repeal of the Act when the newly substituted V.A.T. Act has not provided for any such similar exemption. It was submitted that it has to be presumed that the Legislature has considered and not thought it desirable to continue with such exemptions, and therefore, the Court may not intervene.

9.8. Learned Government Pleader Mr. Shah also referred to the provisions of Section 5 of the Sales Tax Act and the pleadings and submitted that the notification has been issued granting exemption in exercise of power u/s 49(2) of the Sales Tax Act. Section 5(2) of the Sales Tax Act provides that the State Government may enlarge such benefits and it is an enabling or empowering provision for the purpose of adding or deleting any entry, which is again a legislative power. Therefore, it was submitted that Entry 74 of Schedule I of the Sales Tax Act, by which such benefit of exemption was granted, was pursuant to the provisions of Section 5 read with Section 49(2) of the Sales Tax Act. However, that would not mean that the newly substituted V.A.T. Act should also have the same benefit or the same provision. Learned Government Pleader Mr. Shah referred to the pleadings and also the Sales Tax Act as well as the V.A.T. Act and referring to the pleadings and the V.A.T. Act, it was submitted that while introducing the V.A.T. Act, 42 entries are deleted for which examples are stated at pages 292 and 293, He again referred to the notification at page 292 of 1st April, 2006 and submitted that it is this notification by which the exemption has been granted, which has been withdrawn. He also referred to the Notification of 18-8-2006 at page 142 which refers to the eligibility criteria under the V.A.T. Act and submitted that it provides for eligibility criteria for the benefit of exemption under the V.A.T. Act.

9.9. Similarly, another Notification dated 18-8-2006 was also referred to by the learned Government Pleader in support of his submission that if the benefit was intended to be given to the petitioners, the notification would have been issued under the newly substituted V.A.T. Act.

9.10. Learned Government Pleader Mr. Shah further emphasized that before the V.A.T. Act was brought into force, all the exemptions granted under the erstwhile Sales Tax Act were withdrawn and thereafter, while bringing into force the newly substituted V.A.T. Act, entries have been revised and considered and the benefit of exemption under the V.A.T. Act has been granted to some of the units, meaning thereby, the Legislature has not thought it fit to continue the same benefit to many such units.

9.11. Learned Government Pleader Mr. Shah also referred to the scheme of the V.A.T. Act and submitted that there is a difference between the scheme of the Sales Tax Act and the V.A.T. Act. Sales tax refers to the taxation at one stage which would be passed on whereas V.A.T. is a multi point entry tax. It is a tax on a particular point, that is, tax on the sale, and if we put a tax on the input, then it is not consistent with the V.A.T. He therefore, submitted that it would be incompatible under the V.A.T. Act if the effect of Entry 95 under the erstwhile Sales Tax Act is continued. He also referred to Entry 95 at p. 108 and submitted that it refers to exemption from purchase tax under the Sales Tax Act. He referred to Para B of Entry 95 and submitted that under the scheme of V.A.T. Act it is not permissible and justified to continue with the exemption.

9.12. Therefore, learned Government Pleader Mr. Shah emphasized that considering the newly substituted V.A.T. Act, when the legislature has not thought it fit or desirable to continue with the exemption, the scope of judicial review will be very limited and the Court cannot substitute its opinion. The direction is sought from the Court that the Government should extend this benefit, and therefore, exercise legislative power for grant of exemption under the V.A.T. Act in favour of the petitioners.

9.13. Learned Government Pleader Mr. Shah referred to and relied upon the judgment of the Hon''ble Apex Court in the case of Kasinka Trading and another, etc. etc. Vs. Union of India and another, and emphasizing the observations made in Paras 12 and 28, it was strenuously submitted that it is a legislative function and the scope of judicial review is very limited. It was submitted that even if the benefit of exemption which was granted under the erstwhile Sales Tax Act was for a specific time-limit, still, it cannot be argued that the same cannot be withdrawn. If the Government, by virtue of exercise of power under the statute, has granted exemption, it has also a right to withdraw, in exercise of such power, any such exemption or benefit, which is again a legislative function and also it is a matter of policy. Therefore, it was submitted that the notification granting exemption has been cancelled before the V.A.T. Act was brought into force, and thereafter, the benefit of exemption under the newly substituted V.A.T. Act has been granted as desired by the Legislature for which the petitioners cannot make a grievance, nor the Court should interfere with it.

9.14. Referring to the observations made in Para 12 of the said judgment, he emphasized that,

the doctrine of promissory estoppel cannot be pressed into aid to compel the Government or the public authority "to carry out representation or a promise which is contrary to law or which was outside the authority or power of the officer of the Government or of the public authority to make." There is preponderance of judicial opinion that to invoke the doctrine of promissory estoppel clear, sound and positive foundation must be laid in the petition itself by the party invoking doctrine and that bald expressions, without any supporting material, to the effect that the doctrine is attracted because the party invoking the doctrine has altered its position relying on the assurance of the Government would not be sufficient to press into aid the doctrine. In our opinion, the doctrine of promissory estoppel cannot be invoked in the abstract and the Courts are bound to consider all aspects including the results sought to be achieved and the public good at large, because while considering the applicability of the doctrine, the Courts have to do equity and the fundamental principles of equity must for ever be present to the mind of the Court, while considering the applicability of the doctrine. The doctrine must yield when the equity do demands if it can be shown having regard to the facts and circumstance of the case that it would be inequitable to hold the Government or the public authority to its promise, assurance or representation.

9.15. Learned Government Pleader Mr. Shah also referred to and relied upon the judgment of the Hon''ble Apex Court in the case of Sales Tax Officer and Another Vs. Shree Durga Oil Mills and Another, and emphasized, referring to the observations made in this judgment, when the public interest demands can override the consideration of private loss. He submitted that Section 5 of the Sales Tax Act empowers the State Government to issue notification for grant of exemption and also empowers the Government to withdraw the same. Therefore, there cannot be any promissory estoppel against the statute for withdrawal of the benefit of exemption granted in exercise of power under the same statute when it is sought to be withdrawn.

9.16. The learned Government Pleader has also referred to and relied upon the judgment of the Hon''ble Apex Court in the case of State of Punjab Vs. Nestle India Ltd. and Another, , and referring to Paras 28 and 36 he has submitted that as observed in Para 28, before this doctrine could be attracted, the preconditions mentioned therein have to be there, that is,

(1) a clear and unequivocal promise knowing and intending that it would be acted upon by the promisee;

(2) such acting upon the promise by the promisee so that it would be inequitable to allow the promisor to go back on the promise.

Further, referring to Para 36, learned Government Pleader Mr. Shah emphasized with regard to the limitations to the doctrine of promissory estoppel, which has been discussed, referring to the earlier judgment in the case of Motilal Padampat Sugar Mills (supra) and he emphasized that,

there can be no promissory estoppel against the legislature in exercise of its legislative functions nor can the Government or public authority be debarred by promissory estoppel from enforcing a statutory prohibition.

He further emphasized, referring to observations made in this Para, that,

the promissory estoppel cannot be used to compel the Government or a public authority to carry out a representation or promise which is contrary to law or which was outside the authority or power of the officer of the Government or of the public authority to make.

9.17. Further, the learned Government Pleader also submitted, referring to the scheme of the newly substituted V.A.T. Act, that it is incompatible, and therefore, the observations which have been made in this Para are required to be appreciated to which he has pointedly focused,

We may also point out that the doctrine of promissory estoppel being an equitable doctrine, it must yield when the equity so requires; if it can be shown by the Government or public authority that having regard to the facts as they have transpired it would be inequitable to hold the Government or public authority to the promise or representation made by it, the Court would not raise an equity in favour of the person to whom the promise or representation is made and enforce the promise or representation against the Government or public authority.

9.18. The learned Government Pleader has referred to and relied upon the judgment in the case of State of Rajasthan and Another Vs. J.K. Udaipur Udyog Ltd. and Another, and referring to Para 25, which is again a matter relating to sales tax exemption, he submitted that, "an exemption granted under a statutory provision in a fiscal statute has been held to be a concession granted by the State Government", and therefore, it was submitted that,

the recipient of the concession has no legally enforceable right against the Government to grant of a concession except to enjoy the benefits of the concession during the period of its grant.

(Emphasis supplied)

9.19. The learned Government Pleader referred to the judgment of the Hon''ble Apex Court in the case of Gajraj Singh etc. Vs. The State Transport Appellate Tribunal and others etc., and referring to the observations made in Para 35, submitted that as observed in this judgment, the right acquired or accrued under a repealed Act would not survive and it cannot be said to be any vested right. He submitted, referring to Section 6 of the General Clauses Act, that the interpretation with regard to the effect of how the right could be affected on repeal of the Act which has been discussed, it was emphasized that the existence of the provisions of the Act consistent with the repealed Act is a precondition and as it was a matter regarding renewal of a permit in this judgment, it has been observed that there may not be any vested or accrued right.

9.20. Therefore, the learned Government Pleader submitted that the benefit of exemption granted under a fiscal law like the Sales Tax Act is a concession and it cannot be claimed as a matter of right when the Act itself under which such benefit or exemption is granted, has been repealed and it will go and it will not survive any longer. Therefore, the submissions made by the learned Counsel for the petitioners on the ground that the benefit which was granted under the erstwhile Sales Tax has to be continued or has to be granted under the newly substituted V.A.T. Act may not be believed.

9.21. He further submitted that by doing so, the Court would be stepping into the domain of the legislature as to grant of a concession or a benefit of exemption under the V.A.T. Act, which the legislature has not granted.

9.22. The learned Government Pleader also strenuously submitted that, for that purpose, as pointed out referring to the pronouncement of the Hon''ble Apex Court, that the Court cannot interfere and the Court should not enter in the domain of the legislature by giving any direction to exercise a discretion for grant of exemption under the newly substituted V.A.T. Act, which is a legislative function.

9.23. Further, the learned Government Pleader also submitted that the exemption which was granted under the erstwhile Sales Tax Act, on the basis of which the claim is made on the ground of promissory estoppel, is also misconceived as, in light of the observations of the Hon''ble Apex Court, the doctrine of promissory estoppel will not be attracted and there cannot be any promissory estoppel against the legislature. Therefore, he repeated and emphasized that the benefit of exemption which was granted under the erstwhile Sales Tax Act, and which has been repealed, the matter ends there and the newly substituted V.A.T. Act has, though having a power to grant exemptions, have thought it fit not to grant such benefit of exemption to a number of such industries, as stated above, where the grant of such benefit of exemption has been limited or restricted by removing such exemption for more than 60 entries, the doctrine of promissory estoppel has no application. It was submitted that, before this doctrine of promissory estoppel has applicability, there has to be a foundation for that and the precondition has to be satisfied that any promise was held out. In fact, it is a matter of policy which is sought to be changed and it cannot be said that any promise was held out by the Government, as contended.

9.24. The learned Government Pleader also referred to the judgment of the Hon''ble Apex Court in the case of Ashok Kumar Maheshwari v. State of U.P. and Anr. reported in 1998 (2) SCC 502, and referring to the observations in this judgment submitted that the promissory estoppel cannot be invoked to enforce a promise contrary to law and also submitted that the principle is that the "plea of estoppel cannot be raised to defeat the provisions of a statute." (emphasis supplied). Therefore, learned Government Pleader Mr. Shah strenuously submitted that when the newly substituted V.A.T. Act does not provide for any exemption, the doctrine of promissory estoppel cannot be invokved contrary to or to defeat the provision of a statute.

9.25. He also referred to the judgment of the Hon''ble Apex Court in the case of Gammon India Ltd. v. Sp. Chief Secretary and Ors. reported in 2006 (145) STC 1, which was referred to and relied upon by learned Sr. Counsel Mr. J. P. Shah for the petitioners. The learned Government Pleader submitted that it refers to the initiation of proceedings and not the exemptions, and therefore, it will not have application in the facts of the present case.

9.26. He also referred to and relied upon the judgment in the case of Khazan Chand Nathi Ram v. State of Haryana and Ors. reported in 2004 (136) STC 261 , which is also referred to and relied upon by the learned Counsel for the petitioners. The learned Government Pleader also referred to the judgment in the case of Hotel Madhuvan International Private Limited Vs. State of Karnataka and Others, referred to and relied upon by the learned Counsel for the petitioners, and submitted that in that case the Government had not withdrawn any Notification, whereas in the facts of the present case, the notification has been rescinded, which would make the difference, and therefore, it will not have any application to the facts of the present case.

9.27. The learned Government Pleader also referred to and relied upon the judgment of the Hon''ble Apex Court in the case of S.L. Srinivasa Jute Twine Mills P. Ltd. Vs. Union of India (UOI) and Another, referred to by the learned Counsel for the petitioners, and submitted that the facts of the case before the Hon''ble Supreme Court and the present case are different, and therefore, it will not have any application.

9.28. The, learned Government Pleader then referred to the national policy and submitted that the ultimate object of giving promotion or benefit of exemption is for the economic development and if the companies which have fulfilled the criteria by making investments which are eligible, they should be granted the benefit of exemptions and the petitioners who are not covered by such criteria would not be entitled for such exemption. He, therefore, submitted that the comments and the submissions made referring to fact that benefit of exemption is granted to certain industrial groups or units who could afford and who could have made higher investment are sought to be conferred with such benefit of exemption, whereas the units like the petitioners who have set up industries under the K.V.I.C. Act with the basic object of promoting the industries in village areas are sought to be denied such benefit, and therefore, it is contrary to the very basis or the basic policy cannot be accepted and such arguments deserve to be rejected.

9.29. He also referred to the judgment of the Hon''ble Apex Court in the case of Southern Petrochemical Industries Co. Ltd. Vs. Electricity Inspector and E.T.I.O. and Others, and submitted, referring to the observations made in Para 100, that, "if by a statute, the benefit of exemption or a right is conferred, under the same statute the notification granting such benefit of exemption could be withdrawn, and it cannot be said to be arbitrary and there cannot be any estoppel."

9.30. The learned Government Pleader also referred to and relied upon the judgment of the Hon''ble Apex Court in the case of Bannari Amman Sugars Ltd. Vs. Commercial Tax Officer and Others,

9.31. Further, he also referred to and relied upon the judgment of the Hon''ble Apex Court in the case of Dr. T.A. Quereshi Vs. Commissioner of Income Tax, Bhopal,

9.32. Similarly, the learned Government Pleader referred to and relied upon the judgment of the Hon''ble Apex Court in the case of Indian Airlines Officers'' Association Vs. Indian Airlines Ltd. and Others, , and referring to the observations made in Para 32, he submitted that, even "if there may be a different view point or a better formula, the Court cannot substitute its wisdom for Government''s, save to see that unreasonable perversity or mala fide manipulation, arbitrariness and like infirmities do not defile the equation for integration".

9.33. Therefore, it was submitted that when the legislature has not deemed it proper to grant or continue exemption, the Court, while interfering with such a fiscal statute, would be slow and the scope of judicial review is very limited.

9.34. Again, the learned Government Pleader referred to and relied upon the judgment of the Hon''ble Apex Court in the case of U.P. Power Corporation Ltd. & Anr. (supra) and submitted that in the said judgment distinction has been made between the primary legislation and the delegated legislation, and as observed, again, it is a matter of policy.

9.35. The learned Government Pleader referred to the judgment in the case of Khadi Grama Vyavasaya Association (State Committee) Vs. State of Kerala and Another, and submitted that though observations have been made, it has to be considered in light of provisions of the statutes like the Sales Tax Act and the V.A.T. Act. He also referred to the Gujarat Sales Tax Act and submitted that what has been provided in the Gujarat Sales Tax Act is not provided or covered in the newly substituted Gujarat V.A.T. Act. For that purpose, he referred to Section 15 of both the Acts and submitted that the purchase tax is not covered in newly substituted V.A.T. Act. Similarly, he referred to Section 5(1)(b) and submitted that it has to be read and the judgments or observations made in the judgment referred to and relied upon by learned Counsel for the petitioners have to be read with the provisions of the statute, and therefore, the applicability of the erstwhile Sales Tax Act itself would arise and he has strenuously submitted that promissory estoppel would not apply to the legislative field, and therefore, the Court may not interfere in the domain of the Legislature as it has to confine only to the interpretation part of the statute, more particularly so in case of the fiscal law.

9.36. The learned Government Pleader also referred to the scheme of the V.A.T. Act and tried to submit that it is different from the Sales Tax Act and withdrawal of the notification granting benefit of exemption to the petitioners was in the public interest and the persons like the petitioners cannot claim any vested right to have the benefit of exemption continued under the newly substituted V.A.T. Act and also perpetually. He also submitted that under the newly substituted V.A.T. Act, such benefit of exemption is not saved, and therefore, repeal and saving provision of the V.A.T. Act would not be applicable at all as the notification itself was withdrawn or rescinded. He further submitted that assuming that there is any right on the basis of the notification issued under the erstwhile Sales Tax Act, it would come to an end the moment the impugned statute under which such notification or the benefit granting exemption was issued as the Act itself has been repealed, and as laid down by the Hon''ble Apex Court, it has to be read as if the statute never existed, and therefore, the notification under the erstwhile Sales Tax Act also will go and the newly substituted V.A.T. Act would be applicable and nobody can claim a vested right and when the Legislature has enacted the new substituted law, which has not granted such benefit, it cannot be argued that the right granted or the notification issued under the erstwhile Sales Tax Act would remain in existence and it will have any force when the main statute, i.e., the Sales Tax Act, itself is repealed.

9.37. Further, it was submitted that it is a matter of policy that when a new Act is brought into force and when similar benefit of exemption has not been continued or granted afresh, the persons like the petitioners cannot claim the benefit. Otherwise, it would be adding to the statute, which is a legislative function.

9.38. Learned Government Pleader Mr. Shah, again, summarizing on the aspect of the doctrine of promissory estoppel, submitted that it has no application as the condition precedent for attracting the doctrine, that is, there has to be a promise, and there is nothing to show that a promise was held out, and the decision was altered to the detriment of the petitioners. He, therefore, referring to the provisions of Section 49(2) of the Sales Tax Act, submitted that the notification was issued granting the benefit of exemption under the erstwhile Sales Tax Act, which has been repealed, and therefore, the notification cannot have any effect and it cannot survive.

9.39. The learned Government Pleader also submitted, again referring to Section 49(2) of the Sales Tax Act, that the certificate of exemption cannot be construed as a promise. Further, it was submitted that it does not lay down any period of validity, and therefore, in exercise of the same power, it was withdrawn or rescinded by the Government. It was also submitted that the notification is issued by the Commissioner of Sales Tax and not by the Government and the promise has to be by the Government, which is not made out.

9.40. Lastly, the learned Government Pleader submitted that in any case, it is a policy decision and also, as submitted hereinabove, whether to grant exemption under the newly substituted V.A.T. Act is a legislative function, and therefore, the Court may not interfere and may not grant any relief as prayed for and the petitions may be dismissed.

Learned Sr. Counsel Mr. S.N. Shelat for the petitioners, again, referred to the Government Notification dated 31-3-2006 issued by the Finance Department under the Sales Tax Act and submitted that it is by this Notification the earlier Notifications dated 29-4-1970 and 1-4-1992 have been rescinded, and therefore, it has been challenged. He also referred to the certificate of exemption under Entry 74 of Schedule I of the Sales Tax Act, at Annexure-G, and submitted that in exercise of powers under the Sales Tax Act, this notification has been issued granting exemption and one of the conditions clearly suggests that the said certificate would be effective from 1st December, 2005 to 30th November, 2008, and therefore, submitted that the validity period is not prescribed is not correct. Further, he also submitted that it has been granted and such notifications have been issued from time to time. For that he referred to the provisions of the Sales Tax Act as well as the newly substituted V.A.T. Act and submitted that even issuing Notification dated 31-3-2006, by which the earlier certificate granting exemption has been rescinded, is bad and once the period of validity of the benefit conferred by the certificate issued under the statute is up to 30-11-2008, it could not have been rescinded or withdrawn.

10.1. Further, learned Sr. Counsel Mr. Shelat submitted that it could not have been withdrawn or rescinded in this fashion unilaterally without affording any opportunity of hearing to the petitioners or making any representation.

10.2. Moreover, he referred to Annexure-J, which is Schedule-I to the V.A.T. Act, and submitted that under the newly substituted V.A.T. Act also Entry 36-B refers to almost similar items and it provides for grant of similar benefit of exemption by issuance of notification under the newly substituted V.A.T. Act, and therefore, it cannot be said or argued that the legislature had not desired to confer any such benefit under the newly substituted V.A.T. Act.

10.3. Learned Sr. Counsel Mr. Shelat also referred to the judgment of the Hon''ble Apex Court in the case of Southern Petrochemical Industries Co. Ltd. (supra), and referring to Para 100, again he emphasized the observations and submitted that the Hon''ble Apex Court has dealt with the submissions and the contentions raised by the respondent-Government that "exemption from tax is a mere concession defeasible by the Government and does not confer any accrued right to the recipient", and such a contention has been negatived by observing, "right of exemption with a valid notification issued gives rise to an accrued right. It is a vested right. Such right had been granted to them permanently." Learned Sr. Counsel Mr. Shelat submitted that the word "permanently" does not mean all time to come, but at least till the expiry of the period of the certificate issued, i.e., up to 30-11-2008.

10.4. It is observed in the same Para that " ''permanence'' would mean unless altered by statute. Thus, when a right is accrued or vested, the same can be taken away only by reason of a statute and not otherwise. Thus, a notification which was duly issued would continue to govern unless the same is repealed".

10.5. He also referred to the observations made in Paras 89-93 to substantiate and support the contention that the earlier certificate of exemption issued under the erstwhile Sales Tax would remain in force and it would be saved by virtue of Section 100 of the newly substituted V.A.T. Act. For that he referred to Section 100 of the V.A.T. Act and pointedly referred to the observations in Paras 89-93 and submitted that the Court is required to consider what would be the effect when the statute is repealed and another statute is brought into force with such repeal and saving clause and how it should be interpreted. He, therefore, emphasized that the submission made regarding Section 6 of the General Clauses Act that "unless different intention appears" has to be read in the context of the repeal and saving provision of the newly substituted V.A.T. Act. He, therefore, referring to the observations made in this judgment, submitted that these words have not been used and the language in which Section 100 of the newly substituted V.A.T. Act has been elaborately enacted specifically mentioning about the right, title, interest accrued and also referring to the notification would imply that such notification or the certificate by which the right is accrued would be saved till the expiry of such notification or the certificate. He further, submitted that while interpreting such repeal and saving provision, the Hon''ble Apex Court in this judgment has also referred to Section 6 of the General Clauses Act and has clearly observed that if the legislature has used different words, "unless a different intention appears" cannot be read or added into it. He submitted that Section 100 of the newly substituted V.A.T. Act, which is a repeal and saving provision, is elaborate enough to provide for such situations, and therefore, it has been a little more elaborate than usual phrases used in such repeal and saving provisions of the statute. He, therefore, emphasized that the submissions and the contentions raised by the other side are misconceived and may not be accepted.

10.6. Learned Sr. Counsel Mr. Shelat also referred to the judgment in the case of Mahabir Vegetable Oils P. Ltd. (supra) and emphasized, as observed in Para 29, referring to the observations made in the case of Motilal Padampat Sugar Mills Co. Ltd. (supra), that the doctrine of promissory estoppel operates even in the legislative field.

10.7. Referring to the observations made in the case of U.P. Power Corporation Ltd. & Anr. (supra), he again emphasized that the Hon''ble Apex Court has also observed with regard to the role of the Government in the changing scenario of the global economy, and therefore, the submissions made by the learned Government Pleader emphasizing about the limited scope of judicial review or non-applicability of promissory estoppel cannot be accepted.

10.8. Learned Sr. Counsel Mr. Shelat, therefore, submitted that the present petitions may be allowed and the reliefs as prayed for may be granted and the Notifications dated 31-3-2006 by which the earlier certificate granting exemption has been rescinded may be quashed and set aside.

In view of the rival submissions, it is required to be considered whether the doctrine of promissory estoppel would be applicable or attracted. Again, whether it would have application to the legislative field. Further, it is also to be considered in light of the submissions made with much emphasis about the scope of judicial review and the contentions that since the grant of exemption and withdrawal or rescinding of the notification issued under the earlier Sales Tax Act and substitution thereof by another law, i.e., V.A.T. Act, not providing for similar benefit of exemptions, and therefore, it is a legislative domain where the Court cannot interfere is required to be examined.

Another facet of the argument, which both the sides have advanced, referring to the scheme of the Sales Tax as well as the V.A.T. Act, in particular Section 100 of the V.A.T. Act providing for repeal and saving, and the submissions made for the interpretation of Section 100 of the V.A.T. Act, is required to be appreciated.

Scope of Judicial Review

The first aspect about the scope of judicial review and interference which has been emphasized referring to the legislative domain is required to be considered. Though, the learned Government Pleader had emphasized on this aspect, it is well settled that the concept of judicial review is accepted as a basic feature of the Constitution and without any limitation the scope of judicial review has been accepted.

The Hon''ble Supreme Court has observed, referring to the scheme of the Constitution as well as the significance of the perception that Part III and Part IV of the Constitution together constitute the core of commitment to social revolution and they, together, are the conscience of the Constitution is to be traced to a deep understanding of the scheme of the Indian Constitution. Referring to the scope of judicial review, it has been observed,

The Court is the ultimate interpreter of the Constitution and when there is manifestly unauthorized exercise of power under the Constitution, it is the duty of the Court to intervene. The Supreme Court, as much as to other branches of Government, is committed the conservation and furtherance of constitutional values. The Court''s task is to identify those values in the constitutional plan and to work them into life in the cases that reach the Court.... The Court cannot and should not shirk this responsibility, because it has sworn the oath of allegiance to the Constitution and is also accountable to the people of this country.

These very principles and the guidelines have been reiterated subsequently in a judgment of the Hon''ble Apex Court by a Constitution Bench in the case of I.R. Coelho (Dead) By LRs. Vs. State of Tamil Nadu and Others,

From the history of judicial pronouncements and the observations made from time to time, it has been well accepted that the judicial review is an integral part of the basic feature of the Constitution. It is also required to be emphasized that the Courts have at the same time exercised and shown self-restraint while undertaking judicial review in the matters brought before the Courts. Therefore, it is more a matter of discretion and restraint and also caution rather than total lack of power or limitations on the power on the part of the Court. In this connection, a useful reference can be made to the observations made by the Hon''ble Apex Court in a judgment reported in the case of Sri Rajendra Singh Rana and Others Vs. Swami Prasad Maurya and Others,

Similarly, though it has been much emphasized referring to the fact that the scope of interference or judicial review when it is a fiscal statute, again, it is a matter of sound discretion normally exercised by the Courts, and therefore, it cannot be argued or accepted as a principle that the scheme or the fiscal law is immune from judicial review, or it is beyond the scope of judicial review, particularly when judicial review has been accepted as a basic feature of the Constitution. Even the law or the validity of the law could be examined when it has been challenged or attacked in light of the constitutional provisions, particularly Articles 14, 19 and 21.

Therefore, there is no gainsaying that, normally, the Court should not intervene or should be very slow and cautious while examining or interfering with a fiscal law in exercise of judicial review. But, it is required to be examined in context of reasonableness and fairness and also in background and light of the constitutional provisions itself, that is, Article 14 as well as even the Directive Principles of State Policy enshrined in the Constitution, which has, again, a reference to the basis for the scheme for such exemption and/or grant of such benefits like exemption from payment of tax to the industries established under the K.V.I.C. Act.

A useful reference is also required to be made to the observations made by the Hon''ble Apex Court in its judgment in the case of State of Gujarat Vs. Mirzapur Moti Kureshi Kassab Jamat and Others, , in which it has been observed that even the Directive Principles of State Policy in a given case, referring to transformation of the society or the cause of the people, would be enforceable and justiciable. It is in background of this the Preamble to the K.V.I.C. Act under which the petitioner units are established are required to be examined.

The Objects and Reasons reveal the basic idea for establishment of the units under the Act and the enactment itself is to permit industries for the development of the rural areas. The purpose is to attract people to establish units in such rural and backward areas which in turn provide employment to local people and also such economic activity would be beneficial for not only the rural population for the development of the rural areas but would also help industries to grow by providing such beneficial exemptions. It is in a way a kind of promise held out for attracting establishment of such industries or units under the K.V.I.C. Act to achieve such objects. Therefore, the observations of the Hon''ble Apex Court referred to by learned Sr. Counsel in case of Motilal Padampat Sugar Mills Co. Ltd. (supra) that if the detriment is caused as a result of promisor receding from his promise, it would certainly be detriment attracting promissory estoppel.

Another scheme, to which reference has been made by the learned Government Pleader while referring to the exemption granted to the industrial houses which have established similar units for manufacturing many other products who have been extended the benefit of exemption under the V.A.T. Act is also required to be considered. A close scrutiny would broadly suggest that the central idea, as reflected in the objects and reasons of the K.V.I.C. Act, and the scheme which is sought to have been referred to or which is sought to have been a policy matter of the Government for the purpose of development in the rural areas, that they have granted exemptions to some of the units and at the same time not thought it desirable to extend similar benefit under the newly substituted V.A.T. Act to several other units by deleting the entries, is required to be examined.

Both have the central theme of promoting industries for the purpose of development in the rural areas. Again, for the purpose of development or promotion of rural areas, what schemes are to be evolved, what benefit or how the benefits like exemptions from fiscal measures to be taken, etc., are again a matter of policy which is left to the discretion of the Government.

However, the emphasis on the aspect that in spite of similar provision in V.A.T. Act empowering the grant of exemption and in spite of having Entry 36-B for similar products at Annexure-J, and still units like the petitioners are not extended such benefit, it would stare in the face when it is compared with other units having the same benefits established by other industrial groups. However, the eligibility criteria and other ingredients or considerations which are referred to may not be the only aspect and the Court is not required to go into the details for the purpose of these petitions once it is accepted that the doctrine of promissory estoppel would be attracted apart from the submissions or arguments with regard to discrimination, etc. In other words, independent of the scrutiny on the ground of discrimination and other such aspects, the doctrine of promissory estoppel would be attracted.

At the same time, a few admitted facts are required to be appreciated. The petitioner units have been established under the K.V.I.C. Act and they have been granted exemption under the Sales Tax Act, for which certificate granting exemption in the case of the petitioners in Spl.C.A. No. 23720 of 2006 has been produced at Annexure-G, which is a certificate regarding grant of exemption from the payment of sales tax for the period from 1-12-2005 to 30-11-2008. The benefit by such Government Notification in exercise of powers under a statute like the Sales Tax Act has been extended or granted, and therefore, a right can be said to have been accrued in favour of the petitioners till the expiry of the validity of the said certificate.

The submissions made by learned Government Pleader Mr. Shah that such benefit of exemption was granted under the Sales Tax Act in exercise of powers u/s 49(2) and the same can be withdrawn or rescinded in exercise of the same power under the same statute i.e. Sales Tax Act, and it has been done so before the newly substituted law, i.e., the V.A.T. Act has been brought into force. Therefore, the emphasis, as it is evident, is that even before the Sales Tax Act has been repealed, the benefit or certificate of exemption, which was to be valid from 1-12-2005 to 30-11-2008 has been rescinded as per Notification at Annexure-I dated 31-3-2006 in exercise of the same powers u/s 49(2) of the Sales Tax Act.

There is no quarrel with the submission that if the statute empowers the Government to exercise discretion for grant of the benefit of exemption, the same powers can be resorted to for withdrawal of those exemptions also. However, once such a benefit has been extended in exercise of statutory power like Section 49(2) of the Sales Tax Act granting the benefit of exemption for the period from 1-12-2005 to 30-11-2008, there has to be justification for rescinding or withdrawing such benefit of exemption. There is no justification or public interest explained, except an argument that the same powers have been exercised by which the benefit was extended for the purpose of withdrawal or rescinding the benefit under the statute i.e. the Sales Tax Act, and thereafter, a newly substituted law, i.e., V.A.T. Act, has been introduced which does not confer the same benefit of exemption. The submissions have been made that if the new substituted law i.e. V.A.T. Act does not confer the same benefit of exemption under the Act, a grievance could not be made and the petitioners cannot make a grievance that discretion had to be exercised for grant of such benefit of exemption under the new Act, when the legislature has thought it fit not to grant any such benefit of exemption under the new law.

Further, the submissions have been emphasized that the Court would also not go into this while undertaking judicial review inasmuch as, when the legislature has not thought it desirable to grant or continue such benefit of exemption, the Court cannot interfere substituting its own opinion, and thereby, add or amend the law, which would be a legislative function and interference in the legislative domain.

At the first blush, this argument may sound a little appealing, but a close scrutiny would reveal that, in fact, the argument is devoid of merits. If the submission or the contention raised by the learned Government Pleader is accepted, the benefit of exemption from the sales tax was granted in exercise of powers under the Sales Tax Act, and as reflected in Notifications dated 31-3-2006 at Annexure-I by which such certificate is rescinded, is also in exercise of the same power u/s 49(2) of the Sales Tax Act. The Notifications dated 31-3-2006 at Annexure-I by which the benefit of exemption or the certificate granting exemption has been rescinded has also a reference to Section 21 of the General Clauses Act. It would therefore mean that before the erstwhile Sales Tax Act was repealed in exercise of the same power, under which the benefit of exemption was extended, are sought to be rescinded without any justification or reason. As it transpires, the only argument or submission or justification is that the Sales Tax Act was to be repealed and replaced by V.A.T. Act, and therefore, the benefit of exemption granted by the certificate or notification issued in exercise of powers u/s 49(2) of the Sales Tax would have remained in force during the period from 1-12-2005 to 30-11-2008, even after repeal of the Act. But Notifications dated 31-3-2006 at Annexure-I have been issued to rescind the benefit already granted, and thereafter, the newly substituted V.A.T. Act has been brought into force.

The newly substituted V.A.T. Act, though refers to the powers for exercise of discretion for grant of exemption and has also a reference to Entry 36-B under Schedule-I referring to the similar items of production, the notification qua the petitioner-industries have not been issued, meaning thereby, the newly substituted legislation also does not preclude the Government from exercise of such power for grant of extension of the benefit of exemption. On the contrary, the lgislature has provided for such discretion for the benefit of exemption to be extended and the power of exemption has not been curtailed under the newly substituted V.A.T. Act.

Be that as it may, as rightly submitted and emphasized, the Court may not substitute its opinion or interfere with the grant of exemption or exercise of discretion for grant of the benefit of exemption under the newly substituted V.A.T. Act. However, it is very much necessary and relevant to examine the justification for exercise of power for rescinding the same benefit granted earlier under the statute like the Sales Tax Act, though the benefit of exemption by virtue of the certificate or the notification was for the period from 1-12-2005 to 30-11-2008. Thereafter, when the newly substituted V.A.T. Act has been brought into force deleting the entries by which the benefit of exemption has been curtailed, it would be a different matter which the Court may not go into for present controversy. The only aspect is the justification for rescinding the earlier notification before the expiry of the period and the only justification, as it has been argued, is that the newly substituted V.A.T. Act was to be brought into force.

Doctrine of Promissory Estoppel

The point for consideration by the Court would be only limited focusing on this issue that whether there was any justification for rescinding the earlier benefit of exemption granted in exercise of power u/s 49(2) of the Sales Tax Act which was to remain in force for the period from 1-12-2005 to 30-11-2008. If there is no justification or public interest or any other valid reason, it would be hit by the doctrine of promissory estoppel. If the argument is that before the newly substituted law is brought into force, that is, the V.A.T. Act, the existing benefits are sought to be done away with in exercise of the same power u/s 49(2) of the Sales Tax Act would have to be examined. Again, it would require scrutiny as to whether it was justified and whether the Government could have done it particularly when the certificate granting exemption was for the period from 1-12-2005 to 30-11-2008.

The submissions are made by the learned Government Pleader that in exercise of power under the same statute, i.e., Section 49(2) of the Sales Tax Act, the certificate granting the benefit of exemption was issued and in exercise of the same power under the same statute the subsequent notifications dated 31-3-2006 at Annexure-I have been issued by which the earlier notifications granting exemption has been rescinded. It was submitted that as the Sales Tax Act was to be repealed, they have resorted to the same power under the Sales Tax Act by which the exemption was granted and it has been withdrawn, which is a legislative function. Further, the submission is that even before the V.A.T. Act has been brought into force, the benefits existed or granted under the erstwhile Sales Tax Act have been done away with as if the main Act has been repealed. The notifications or the benefit of exemption granted under the Sales Tax Act has been rescinded or withdrawn. Otherwise, it would have remained in force even after the repeal of the main statute under which the benefit has been granted.

These submissions are also misconceived that as newly substituted V.A.T. Act was to be brought into force in place of the erstwhile Sales Tax Act, and therefore, when the Sales Tax Act itself has been repealed, the benefit of exemption or such notifications were sought to be rescinded in exercise of the same power under the Sales Tax Act, as otherwise it would have remained in force even after the repeal of the Sales Tax Act is also misconceived. Even if the Sales Tax Act has been repealed, the benefit granted under the erstwhile Sales Tax Act for the exemption by notification which was to remain valid from 1-12-2005 to 30-11-2008 could have continued or remained and it is only for taking care of such eventualities, Section 100 of the V.A.T. Act providing for repeal and saving clause has been made which takes care of such situation. Further, as rightly emphasized by learned Sr. Counsel Mr. Shelat referring to the Notification dated 1-4-2006 issued under the V.A.T. Act which itself clearly provide in no uncertain terms that the Government of Gujarat continues the tax exemption granted to sale or purchase of goods by industrial units under the earlier law and to whom the eligibility certificate has been granted by the Industries Commissioner (emphasis supplied) and the exemption certificate granted by the Commissioner of Sales Tax subject to the provisions of Chapter IV-A of the Gujarat Value Added Tax Rules, 2006. Therefore, these aspects read with Section 100 of the V.A.T. Act clearly suggest that the legislature was, on the contrary, conscious that such a situation may take place, and therefore, it has been provided for.

Moreover, even if the erstwhile Sales Tax Act was to be repealed and substituted by V.A.T. Act, the said benefit or the certificate granting benefit of exemption for the period from 1-12-2005 to 30-11-2008 would have sustained and remained in force as per Section 100 of the V.A.T. Act. Section 100 of the V.A.T. Act refers to the repeal and saving provision which has been elaborately provided. If the argument of the other side is that it would not have any application at all inasmuch as the notification was issued under the Sales Tax Act, it was rescinded in exercise of the power under the repealed Sales Tax Act itself, then, Section 100 of the V.A.T. Act would be redundant, particularly when it has been phrased elaborately providing for protection and saving of right, title, interest accrued and also has a reference to the notifications issued under the erstwhile Sales Tax Act.

It is in background of this that the interpretation of Section 100 of the V.A.T. Act is required to be made. Even assuming for the sake of argument that Section 100 of the V.A.T. Act providing for repeal and saving clause is made, may be for various other notifications, or such exemptions for which they have not been withdrawn or rescinded, but the notification like in the present case, which has been rescinded in exercise of power u/s 49(2) of the Sales Tax Act itself which has been repealed, and therefore, would not have any application, even then, the doctrine of promissory estoppel would stare in the face. There is no quarrel with the proposition that the Government, in exercise of the same statutory provision by which it has granted the benefit of exemption, could withdraw in the same manner in exercise of the same statutory provision like the Sales Tax Act, but, once the notification granting the benefit of exemption for a period from 1-12-2005 to 30-11-2008 has been issued, it will remain in force and if it has been withdrawn or rescinded before the expiry of the validity thereof, then, there has to be a justification shown or it can be only justified that for such a legislative function powers are exercised in public interest and then perhaps it could be argued that the doctrine of promissory estoppel has no application. However, there is no such justification shown except the fact that the newly substituted V.A.T. Act has been brought into force, and therefore, even if such a law has been brought into force, with Section 100 providing for repeal and saving clause, it may not be necessary to examine on that aspect inasmuch as the Court is required to examine the impugned notifications dated 31-3-2006 at Annexure-I by which the earlier certificate granting benefit of exemption has been rescinded under the same statutory powers under the erstwhile Sales Tax Act.

It is in this context, when there is no explanation or justification for rescinding the benefit of exemption granted earlier for a period from 1-12-2005 to 30-11-2008 before the expiry is coming forth, then, it would certainly attract the doctrine of promissory estoppel irrespective of the fact that it has been rescinded in exercise of the same statutory power under the Sales Tax Act.

A useful reference can be made to the observations made in the judgment of the Hon''ble Apex Court in the case of Mahabir Vegetable Oils P. Ltd. (supra), wherein, referring to the applicability of the doctrine of promissory estoppel, the Hon''ble Apex Court has observed in Para 25, which has also been emphasized by learned Sr. Counsel Mr. S.N. Shelat for the petitioners, that the doctrine of promissory estoppel operates even in the legislative field and observed that there was no overriding public interest which would make it inequitable to enforce the estoppel against the State as it was well within the power of the State to grant such exemption. It is required to be noted, in the facts of the present case, that it is not even a case with regard to grant of exemption under the newly substituted V.A.T. Act, but the emphasis is on rescinding the certificate granting benefit of exemption for the period from 1-12-2005 to 30-11-2008 in exercise of the same power u/s 49(2) of the Sales Tax Act, which has been repealed.

The doctrine of promissory estoppel, which has been evolved and accepted, has been discussed in detail in the case of Motilal Padampat Sugar Mills Co. Ltd. (supra). The Hon''ble Apex Court, in the beginning, has summarized and laid down the outlines broadly with regard to the doctrine of promissory estoppel as under:

How far and to what extent is the State bound by the doctrine of promissory estoppel? It is a doctrine of comparatively recent origin but it is potentially so fruitful and pregnant with such vast possibilities for growth that traditional lawyers are alarmed lest it might upset existing doctrines which are looked upon almost reverentially and which have held the field for a long number of years. The law in regard to promissory estoppel is not yet well settled though it has been the subject of considerable debate in England as well as the United States of America and it has also received consideration in some recent decisions in India, and we therefore, propose to discuss it in some detail with a view to defining its contours and demarcating its parameters.

Further, elaborating on this aspect in this very judgment, referring to the facts of the case there also, where the Government had rescinded the earlier decision which was challenged, and in light of this doctrine, the Hon''ble Apex Court observed,

The law cannot acquire legitimacy and gain social acceptance unless it accords with the moral values of the society and the constant endeavor of the Courts, and the legislatures must therefore, be to close the gap between law and morality and bring about as near an approximation between the two as possible. The doctrine of promissory estoppel is a significant judicial contribution in that direction. But it is necessary to point out that since the doctrine of promissory estoppel is an equitable doctrine, it must yield when the equity so requires.

Further, elaborating on this, referring to the earlier judgment of the Hon''ble Apex Court in the case of Anglo-Afghan Agencies (supra), it is observed,

There was a time when the doctrine of executive necessity was regarded as sufficient justification for the Government to repudiate even its contractual obligations, but, let it be said to the eternal glory of this Court, that this doctrine was emphatically negative in the Anglo-Afghan Agencies'' case, AIR 1968 SC 718, and the supremacy of the rule of law established. It was laid down by this Court that the Government cannot claim to be immune from the applicability of the rule of promissory estoppel and repudiate a promise made by it on the ground that such promise may fetter its future executive action. If the Government does not want its freedom of executive action to be hampered or restricted, the Government need not make a promise knowing or intending that it would be acted on by the promisee and the promisee would alter his position relying upon it....

Further, it has been observed,

If the Government wants resist the liability, it will have to disclose to the Court what are the subsequent events on account of which the Government claims to be exempt from the liability and it would be for the Court to decide whether those events are such as to render it inequitable to enforce the liability against the Government. Mere claim of change of policy would not be sufficient to exonerate the Government from the liability : the Government would have to show what precisely is the changed policy and also its reason and justification so that the Court can judge for itself which way the public interest lies and what the equity of the case demands.

(Emphasis supplied)

Further, it is observed,

It is only if the Court is satisfied, on proper and adequate material placed by the Government, that overriding public interest requires that the Government should not be held bound by the promise and should be free to act unfettered by it, that the Court would refuse to enforce the promise against the Government. The Court would not act on the mere ipse dixit of the Government, for it is the Court which has to decide and not the Government whether the Government should be held exempt from liability. This is the essence of the rule of law.

(Emphasis supplied)

Thus, when there is no overriding public interest shown, still, it may be possible for the Government to rescind from the promise by giving a reasonable justification. It is also required to be noted and mentioned, referring to Anglo-Afghan case AIR 1968 SC 718, referring to the observations made by Lord Denning, J. in Robertson v. Minister of Pensions 1949 (1) KB 227 rejecting the doctrine of executive necessity and held them to be applicable in India,

If our nascent democracy is to thrive, different standards of conduct for the people and the public bodies cannot ordinarily be permitted. A public body is, in our judgment, not exempt from liability to carry out its obligation arising out of representations made by it relying upon which a citizen has altered his position to his prejudice.

Thus, the doctrine of promissory estoppel is a rule of equity which has gained new dimensions and it is also developed over a period of time.

Therefore, the submissions made by the learned Government Pleader with regard to invocation or the applicability of the doctrine of promissory estoppel and the scope of judicial review are thoroughly misconceived. It is required to be mentioned that though it has been much emphasized by the learned Government Pleader referring to the judgment in the case of State of Punjab v. Nestle India Ltd. and Anr. (supra) that it must be first proved that there was a promise made or position was altered because of any such promise. Further, though the emphasis has been made by the learned Government Pleader referring to the observations of the Hon''ble Apex Court in the case of Ashok Kumar Maheshwari (supra) that plea of estoppel cannot be raised to defeat the provisions of a statute, the same are misconceived in light of the discussion and settled position of law that the doctrine of promissory estoppel has a reference to equity and once it has been clearly observed in the case of M.R.F. v. Asst. C.S.T. (supra) that exemption from tax for a fixed period is an accrual of the right and withdrawal of the exemption cannot affect the right. Further, though it has not been referred to, but even if on the ground of executive exigencies unless such exigencies or public interest is shown, such arguments are misconceived and cannot be accepted.

Further, emphasizing on this aspect, referring to the scheme of V.A.T. Act, much emphasis was given to Section 49(2) of the Sales Tax Act, to support the contention that if the discretion was exercised granting certificate of exemption in exercise of such power, then, the Government, in exercise of the very same power under the same statute, has a power to rescind such benefit of exemption granted, for which no grievance could be made. Therefore, the submission was that the impugned notifications dated 31-3-2006 at Annexure-I rescinding the earlier certificate of exemption cannot be challenged as it is a matter of policy for the Government to decide whether the exemption should continued or granted and particularly when the newly substituted V.A.T. Act has been brought into force by which the Legislature has not thought it fit or desirable to continue the exemptions, the petitioners cannot make any claim as they have no vested right and the Court should not interfere in exercise of discretion or in exercise of the same power under the erstwhile Sales Tax Act by which the benefit of exemption was rescinded by another notification. Further, the V.A.T. Act has not granted any such benefit for which the Court may not substitute its opinion or cannot add by directing the Government to grant the exemption which would be a legislative function.

This aspect is again required to be focused in light of the controversy as discussed hereinabove. On one hand, submission is made by the learned Government Pleader that in exercise of the powers under the same statute, i.e., Section 49(2) of the Sales Tax Act, the certificate granting the benefit of exemption was issued and in exercise of the same power under the same statute the subsequent notifications at Annexure-I dated 31-3-2006 have been issued by which the earlier notification granting exemption has been rescinded, meaning thereby, that before the Sales Tax Act was repealed, they have resorted to the same powers under the statute by which the exemption was granted. There is no quarrel with regard to the exercise of power for grant of exemption or withdrawal of exemption and even the executive necessity or policy which the Government may decide. The real crux of the matter is, once having granted the benefit of exemption, which has continued, and when the impugned certificate at Annexure-G by which the benefit of exemption from sales tax has been granted for a period from 1-12-2005 to 30-11-2008, there is no justification shown for premature rescinding of such certificate. Therefore, it is not that the Court has indulged in directing the Government to grant the benefit which is a misconception. The only aspect which is examined or which is required to be focused is, can the Government rescind and take away the benefit of exemption granted earlier under the erstwhile Sales Tax Act which was to remain in force from 1-12-2005 to 30-11-2008?

Even assuming that for a change of policy or for executive necessity or whatever reasons, it was rescinded, then, it was incumbent upon the respondent Government to justify such action for premature termination of such benefit which has been granted by the Government itself in exercise of powers under the same statute, i.e., Section 49(2) of the Sales Tax Act.

Therefore, once the notification has been issued in favour of the party in exercise of powers under the statute, an equity is created, and thereafter, it is no longer a legislative function, but it would be an executive function or it can be a delegated legislation by which such notification granting exemption has been issued.

In scrutiny of the judicial review, the Court is required to consider permissible grounds for exercise of power of withdrawing or rescinding the exemption granted on the ground of executive exigency, policy or the delegated legislation, etc. For this purpose, there has to be justification and there is no justification coming forth in the scrutiny of judicial review, except that the Sales Tax Act was to be repealed and newly substituted V.A.T. Act has been brought into the force. Further, the argument is that once the Sales Tax Act, under which the exemption has been granted has been repealed, every benefit or exemption is deemed to have gone with the repeal of the Act when newly substituted V.A.T. Act has been brought into force which does not provide for such exemption. Moreover, the argument that the benefits of exemption granted in exercise of power u/s 49(2) of the Sales Tax Act have been withdrawn or rescinded in exercise of the same power under the Sales Tax Act before it has been repealed, and therefore, when the main Sales Tax Act itself has been repealed, every benefit or the exemption is deemed to have gone with the repealed Act and the notification granting such exemption under the erstwhile Sales Tax Act would remain in force if it has not been rescinded even after the repeal of the main statute would create a situation that the V.A.T. Act does not provide for such exemption, and therefore, it has been rightly withdrawn by rescinding the notification.

It is required to be considered that the submission that when a statute like the Sales Tax Act has been repealed, it has to be treated as it has never existed and whatever the benefit or exemption is deemed to have gone with the repealed Act is misconceived. It is well accepted that when a statute is repealed or substituted by a new legislation like the V.A.T. Act, to avoid such a situation which has been canvassed before this Court, the new statute provides for repeal and saving clause u/s 100 of the present V.A.T. Act, which takes care of such a situation. Further, the main emphasis or argument is that when the Sales Tax Act itself is to be repealed, the notification or the benefit granted by the notification in exercise of the Sales Tax Act could not remain and it has to be done away with is no justification and the purpose or the idea of issuing the impugned notification rescinding the benefit exemption already granted for the period from 1-12-2005 to 30-11-2008 is that the Sales Tax Act is to be repealed and substituted by the V.A.T. Act. However, this argument itself is misconceived as this could not be a logical argument that when an Act is to be repealed, every notification should be rescinded prematurely. Therefore, the doctrine of promissory estoppel will be attracted. Further, as stated above, the newly substituted law like the V.A.T. Act provides for a repeal and saving clause which would take care of such a situation, and therefore, there is no justification or the justification offered is misconceived.

Further, even if it is assumed that the Court may not substitute its opinion with regard to grant of exemption under the newly substituted V.A.T. Act for future exercise of power contained in the newly substituted V.A.T. Act for a similar grant of exemption, but the action of rescinding the benefit of exemption by the impugned notification by which the benefit which was granted and a right was accrued and correspondingly the liability was incurred by the State cannot be set at naught, and therefore, the exercise of power under the erstwhile Sales Tax Act rescinding the earlier notification granting exemption for the period from 1-12-2005 to 30-11-2008 before the expiry would be bad and illegal.

Therefore, unless there is any justification for this, which the Court is under obligation to examine in light of the observations made hereinabove referring to the evolution and acceptance of the doctrine of promissory estoppel, the submission made by the learned Government Pleader as recorded hereinabove cannot be readily accepted and in fact they are misconceived. As a matter of fact, as stated above, the focus is only with regard to the justification for withdrawal or the notification rescinding the earlier notification granting exemption which is not coming forth.

Therefore, the submissions made by the learned Government Pleader with regard to legislative function repeatedly are thoroughly misconceived. Even if it falls in the domain of the legislature and the newly substituted V.A.T. Act has not provided for such benefit, the Court has not suggested or substituted its opinion, but it is an issue which is required to be focused in light of the doctrine of promissory estoppel.

Moreover, apropos the submissions with regard to the domain of legislative function and the scope of interference by the Court, in somewhat similar situations, the aspect of doctrine of promissory estoppel was also examined in cases before the Hon''ble Apex Court and the Apex Court has also accepted and reaffirmed that the doctrine would be applicable and in a given case it can be invoked or made applicable even in the legislative field also.

A useful reference can also be made to the judgment of the Hon''ble Apex Court in the case of Southern Petrochemical Industries Co. Ltd. (supra). Referring to the issue of promissory estoppel, similar contention advanced by the learned Counsel in that case that there cannot be an estoppel against the statute and in any event the exemption granted under Sub-section (1) of Section 13 of the 1962 Act was subject to cancellation or variation was negatived, and considering the earlier judgments and the doctrine of promissory estoppel, the Hon''ble Apex Court, referring to the observations in the case of Motilal Padampat Sugar Mills Co. Ltd. (supra), has be served,

the law may, therefore, now be taken to be settled as a result of this decision, that where the Government makes a promise knowing or intending that it would be acted on by the promisee and, in fact, the promisee, acting in reliance on it, alters his position, the Government would be held bound by the promise and the promise would be enforceable against the Government at the instance of the promisee, notwithstanding that there is no consideration for the promise and the promise is not recorded in the form of a formal contract as required by Article 299 of the Constitution.

Moreover, in that case, the exemption from electricity consumption tax was granted by a notification under the previous Act which was repealed by subsequent Tamil Nadu Tax on Consumption or Sale of Electricity Act, 2003, which is a situation rather similar to the facts of the present case, and the same argument that exemption from payment of tax in favour of the appellant was a concession and not a vested right which could be claimed was negatived observing that, where the right has accrued under an exemption granted by the authority not giving rise to accrued and vested right, it is not a mere concession defeasible by the Government. Further, it has been observed that where the right to exemption of tax for a fixed period has accrued and the conditions for exemption have also been fulfilled, the withdrawal of that exemption cannot affect the already accrued right unless the statute provides otherwise. The Hon''ble Apex Court considering the repealed Act and the Notification issued under the earlier repealed Act and the substituted T.N. Tax on Consumption or Sale of Electricity Act, 2003 considered that the notification issued under the previous Act is within the purview of the said words "anything duly done", and applying the doctrine of promissory estoppel, has observed that even if it is a policy decision in respect of which the State can be estopped from changing under the doctrine of promissory estoppel. The Apex Court has observed and concluded that in view of the application of the doctrine of promissory estoppel, the right was not destroyed and further it was observed that in view of the matter although the scheme under the impugned Act is different from the earlier Act and also the phraseology used is "the right cannot be said to have been destroyed".

The Apex Court has also referred to the doctrine of legitimate expectation and quoting from from R. v. London Borough of Newham (Bibi case), referring to the doctrine of legitimate expectation, the Apex Court has observed,

In all legitimate expectation cases, whether substantive or procedural, three practical questions arise. The first question is what has the public authority, whether by practice or by promise, committed itself; the second is whether the authority has acted or proposes to act unlawfully in relation to its commitment; the third is what the Court should do.

Again, deliberating on whether the authority has acted unlawfully, the Court has discussed and observed, "whether the reneging on a promise would be so unfair as to amount to an abuse of power is an uncertain guide" and has also observed that, "after having established such an abuse, the Court has to ask, "take the legitimate expectation properly into account in the decision-making process. It does not necessarily follow that a legitimate expectation of a substantive benefit will be satisfied".

Expressing a word of caution, it has also observed that this principle does not mean to be applied in exercise of legitimate power by the State. However, there has to be justification.

The Hon''ble Apex Court, in this very judgment, referring to the judgment in the case of Kasinka Trading v. Union of India 1995 (1) SCC 274, which has been distinguished in subsequent judgment in the case of State of Punjab v. Nestle India Ltd. 2004 (6) SCC 465, and referring to the M.R.F. v. Am. C.S.T. 2006 (8) SCC 702, further it has been observed that,

the doctrine would be inapplicable where a right has already accrued; for instance, in a case where the right to exemption of tax for a fixed period accrues and the conditions for that exemption have also been fulfilled, the withdrawal of that exemption cannot affect the already accrued right.

(Emphasis supplied)

The Hon''ble Apex Court in its judgment in the case of Bannari Amman Sugar Co. Ltd. (supra), considering on the aspect of legitimate expectation, has observed,

a person may have a ''legitimate expectation'' of being rated in a certain way by administrative authority even though he has no legal right in private law to receive such treatment.... A legitimate expectation can provide a sufficient interest to enable one who cannot point to the existence of a substantive right to obtain the leave of the Court to apply for judicial review.... It has to be confined mostly to the right of fair hearing before the decision which results in negativing a promise or withdrawing an undertaking is taken...no crystallized right as such is involved.

Further, referring to the Administrative Law by Wade, (6th Edition), it has been observed that "there is ample room within the legal boundaries for radical differences of opinion in which neither side is unreasonable."

In a judgment in the case of Mahabir Vegetable Oils Pvt. Ltd. (supra) the Hon''ble Apex Court, referring to similar contention with regard to the legislative domain and the legislative function, has referred to the facts before the Hon''ble Supreme Court with regard to grant of exemption and the subordinate legislation by which retrospective effect could be given, has examined and held that the doctrine of promissory estoppel would still apply. It will have applicability even in the legislative field also. Further, the contention that once the exemption is granted, there was no indefeasible right to continue the grant of exemption was negatived referring to the case of Bannari Amman Sugars Ltd. (supra), wherein it has been quoted,

The Courts are bound to consider all aspects including the results sought to be achieved and the public good at large, because while considering the applicability of the doctrine, the Courts have to do equity and the fundamental principles of equity must for ever be present in the mind of the Court.

Therefore, as discussed and stated hereinabove, even such an action by which even if it is assumed that it is a legislative function by delegated legislation, whether the grant of exemption is in exercise of power under the statue or not, still, it has to be tested on the touchstone of Article 14 which has reference to the fairness, equity and justice. This, again, refers to, as quoted above, Wednesbury''s test, and therefore, though submission has been made that issuance of the notification in exercise of power under the statute is a legislative function by way of delegated legislation, nevertheless it could also be viewed as an action by the respondent Government, which is required to be tested on the aforesaid principles. When the statute confers a power for grant of exemption and exemption has been granted, rescinding of the earlier notification in exercise of the same power by a subsequent notification under the repealed Act without any justification, would surely call for scrutiny under judicial review.

The observations made by the Hon''ble Apex Court in Para 20 of its judgment in the case of U.P. Power Corporation Ltd. & Anr. (supra), which has been emphasized by learned Sr. Counsel Mr. Shelat, are also required to be appreciated. Learned Government Pleader Mr. Shah, referring to Para 19 of the said judgment, however, submitted that there cannot any estoppel against a statute. However, the Hon''ble Supreme Court has drawn a distinction by observing,

We have stated above that there cannot be estoppel against a statute. Since, such benefits have not been recognized by the Act of 1999, therefore, up to the date of coming into force of the Act of 1999, all the benefits which were being given to the respondent-entrepreneurs shall be protected by invoking the principle of promissory estoppel, but after coming into force of the Act of 1999, which is a primary legislation enacted by the State Legislature, the benefits from the date the Act has come into force, cannot be made available to the respondents.

It is required to be appreciated that the Hon''ble Apex Court, while considering the aspect of applicability of the doctrine of promissory estoppel to the legislative field, in this very judgment, has observed that there cannot be any estoppel against the statute, but nonetheless, it has also been accepted that it would apply to the delegated legislation, though it may not apply to the primary legislation, meaning thereby, the Hon''ble Apex Court has drawn a distinction between primary and delegated legislation. The earlier judgment, as stated above, has clearly observed that the doctrine would apply even to the legislative function.

It is in this context, the benefit granted under the erstwhile Sales Tax for a period from 1-12-2005 to 30-11-2008 could not have been revoked, and once the doctrine of promissory estoppel has been held to be attracted and available to the petitioners, notwithstanding the newly substituted V.A.T. Act having been brought into force, the benefit of exemption shall have to be allowed to remain in force till the expiry of the notification, i.e., till 30-11-2008. It is a different matter altogether whether the Government thinks it proper or not to extend similar benefit under the newly substituted V.A.T. Act, and as is evident, the Government has not extended by granting the exemption similar benefit under the newly substituted V.A.T. Act, which would be within the legislative domain. However, still, the Court, under the judicial review, is required to examine and scrutinize and appreciate the fact that under the V.A.T. Act itself providing for grant of such benefit of exemption is there. There is an Entry 36-B also, but the notification extending such benefit of exemption qua the petitioners has not been issued, and therefore, though it could be said that by delegated legislation a notification for grant of exemption the Legislature has not thought it fit to grant the benefit, at the same time, it can be viewed that the Legislature has made a provision for grant of benefit of exemption but while issuing notification some of the entries are deleted and/or where the notification for the units like the petitioners has not been issued may be either a legislative function or it could be purely an executive function. The statute has provided for the grant of benefit of exemption and also entry like Entry 36-B for similar items, but when the notification has not been issued qua the petitioners, it could be a matter of policy or merely an executive function and not necessarily a legislative function.

It is required to be appreciated that in the aforesaid discussions the Hon''ble Apex Court like in case of Southern Petrochemical Industries Co. Ltd. (supra) has considered and referred to, while discussing about the doctrine of promissory estoppel, the doctrine of legitimate expectation. This, in our opinion, is further expansion or other side of the same coin like the doctrine of promissory estoppel. As the phrases or the language used in the phrases of both the doctrines suggest, the doctrine of promissory estoppel has reference to stopping the respondent-Government or the authority from undoing or withdrawing what has been already in existence, meaning thereby, estopping from altering the position or backing out. This has a reference to the things which have already come into existence, and therefore, it suggests about estopping the respondent from negativing the effect of something which has taken place on the basis of the promise. The doctrine of legitimate expectation, as the phrase suggests itself, has a reference to some further and positive act by the respondent-Government or the authority which has reference to expectation by a party from the respondent Government or authority to function or to do something which the party having a right under the Constitution or a statue or may be even falling short of vested right having equity in its favour, but expects the respondent-Government or the authority by mutually responding to what has transpired. Therefore, it is the other side of the same coin, but it refers to some further positive act by the authority or the Government to fulfill the expectation which can be said to be legitimate. The Courts, while accepting and following this doctrine of legitimate expectation has also expressed a word of caution that every expectation need not be legitimate and what could be a legitimate expectation has also been discussed and deliberated.

Though, the learned Government Pleader has referred to the scheme known as R.E.G.P. to emphasize the submission that the benefit of exemption from the payment of tax under the newly substituted V.A.T. Act may not be available and the legislature has, while enacting this new law, removed a number of items or entries, which suggests that the exemptions are not to be granted, and therefore, the Court may not substitute its opinion. For that purpose, the learned Government Pleader has pointedly referred to the scheme. Clause (G) of the scheme, which refers to "village industry", reads as under:

any village industry (except those mentioned in the negative list) located in the rural area which produces any goods or renders any service with or without the use of power and in which the fixed capital investment per head of a full-time artisan or worker does not exceed Rs. 50,000/-.

Therefore, the learned Government Pleader has emphasized the aspect of investment of Rs. 50,000/- per head for the artisan/worker and also referred to the negative list. Referring to the negative list of the activities, which is also to be found in the Schedule which enumerates different groups of activities or industries. The purview of Khadi and Village Industries group has referred to Clause (C) which provide "Khadi and Polyvastra and any project producing yarn and cloth under Khadi Certification Rules".

Therefore, he submitted that the khadi industry as referred to in this provide that,

khadi means any cloth woven on handlooms in India from cotton silk woollen yarn hand spun in India or from a mixture of any two or all of such yarns.

To appreciate this submission, it would be necessary to have a reference to the Bombay Khadi and Village Industries Act, 1960, which provides in the Preamble "to provide for the encouragement, organisation, development and regulation of Khadi and Village Industries in the State of Bombay and to constitute one or more Boards to carry out the said objects". The functions of the Board set up under this Act are referred to in Section 11, Chapter III, which are similar in nature to the Khadi & Village Industries Commission Act, which is a Central Act.

Thus, it would clearly suggest that in order to advise the Government on the role of K.V.I.C. in promoting the development and growth of khadi and village industries sector and to review the organizational structure, etc. of the Commission, an Expert Committee was set up by the Government. The recommendations of the Expert Committee have been accepted by the Government and the proposed amendment to. the K.V.I.C. Act seek to modify the relevant provisions of the K.V.I.C. Act for giving effect to such decision, and as it reads in the objects and reasons of the statute and specifically a reference is made to the recommendation,

In order that K.V.I.C. concentrates on promotion of industries in rural areas, it is proposed to amend the definition of "village industries" contained in the Act, so that in future, only units in ''rural areas'' will receive K.V.I.C. support. A saving clause has been provided so that existing units in other areas continue to receive K.V.I.C. support. Since, new categories of industries are coming so that rural industrialization can be promoted at a faster pace than now, it is proposed that all industries located in rural areas are eligible for K.V.I.C. assistance provided the investment on plant, machinery, land and building is less than Rs. 15,000 or such other sum as may be specified from time to time for every job created. It is also proposed to broad base the functions of the K.V.I.C. so as to cater to the needs of the changing industrial scene in the country.

(Emphasis supplied)

Similarly, Section 2(h) defines "village industry" as under:

any industry located in a rural area which produces any goods or renders any service with or without the use of power and in which the fixed capital investment per head of an artisan or a worker does not exceed fifteen thousand rupees or which other sum as may, by notification in the Official Gazette, be specified from time to time by the Central Government.

which is also similar to the definition of ''village industry'' referred to in the Bombay Khadi and Village Industries Act. Section 15 of the K.V.I.C. Act refers to the function of the Commission which have been enumerated and inter alia, Clause (f) refers to, "to undertake directly or through other agencies studies of the problems of khadi or village industries". Clause (1) provides, "to carry out any other matters incidental to the above".

Therefore, if the broad object of the aforesaid two laws, both the State as well as the Central law, are considered in light of the scheme known as R.E.G.P., on which reliance has been placed by the learned Government Pleader, in fact, it has to be in furtherance and for promotion of the objects set out in the statute, and therefore, reference to the village industries specifying the investment or the negative list of activities has to be considered in light of the objects of the statute itself as the scheme cannot run counter to the object of the statute under which or for promotion of the objects of the statute which has been made. The scheme only refers to the aspect of rural development and the object of the Act particularly, as noted and referred to in the K.V.I.C. Act, refers to broad base and also providing encouragement and assistance to such industries in the rural area in changing the industrialization with a view to lend assistance to such industries. Therefore, the submissions made by the learned Government Pleader referring to the scheme are misconceived.

It is in these circumstances, in the present case, if one looks at the basic object or the goal, for grant of exemption to an industry set up under the K.V.I.C. Act, again with reference to the object under the said Act as well as under the scheme referred to by the learned Government Pleader, the ultimate object is the development and providing for development in rural areas, which has again a reference to the Directive Principles of State Policy. Therefore, much emphasis given on the policy aspect or change in the policy aspect by the learned Government Pleader is also misconceived as the core issue or the focus has remained the same, and therefore, once the benefit was granted under the erstwhile statute i.e. the Sales Tax Act, it could not have been withdrawn by a subsequent notification issued for rescinding the earlier notification during the validity of the said notification granting exemption till November, 2008. The doctrine of legitimate expectation would rather go a step forward and the doctrine of promissory estoppel would come into play for estopping the Government from withdrawing such benefit. It is at this stage, when the newly substituted V.A.T. Act has been brought into force having similar powers of granting exemption, and in fact exemptions have been granted partially, and when there is also Entry 36-B referring to the similar products for which such benefit of exemption should be granted or extended, and still when the notifications are not issued under the newly substituted V.A.T. Act in respect of the petitioner units, this doctrine of legitimate expectation would come into play.

If the core issue or the focus has remained unchanged with the change in law, or may be a different method of tax by bringing the substituted law, inasmuch as the learned Government Pleader has referred to the scheme of V.A.T. Act emphasizing that it is a multi point system, still, it has reference to only the method of taxation, but the ultimate object or the idea behind granting such benefit of exemption has remained the same, and it would not change because the Sales Tax Act has been substituted by V.A.T. Act.

It is in these circumstances this Court is of the opinion that on the doctrine of legitimate expectation also the petitioners would be entitled to have similar benefit of exemption granted or extended under the newly substituted V.A.T. Act. Though, this Court is conscious about the submissions made with much emphasis that the Court cannot substitute its own views or direct it to exercise a power, nevertheless, the concept of judicial review still empowers the Court to examine the justification and would also require justification from the Government as to why the benefit has not been extended under the newly substituted V.A.T. Act when there is similar power reserved for grant of exemption. It is also required to be mentioned that by making such provision, the legislature has been conscious and has provided for exercise of such power for grant of exemption to the Government or the executive. Entry 36-B also refers to this very aspect.

Therefore, in light of the discussion made hereinabove, it is evident that the impugned notifications at Annexure-I, by which the earlier certificate of exemption has been rescinded, is bad in law and is not justified and the respondent-Government authorities are estopped from withdrawing such benefit of exemption already granted in exercise of powers u/s 49(2) of the Sales Tax Act, which created an equity, if not right, in favour of the petitioners during the validity of the said notifications for the period from 1-12-2005 to 30-11-2008, and therefore, the aforesaid Government Notifications dated 31-3-2006 rescinding earlier notifications dated 29th April, 1970 and 1st April, 1992, are hereby quashed and set aside. Therefore, the original certificate of grant of exemption (Annexure-G) in exercise of powers u/s 49(2) of the erstwhile Sales Tax Act would remain in force for the period of its duration, that is, till 30-12-2008 even though the newly substituted V.A.T. Act has been brought into force with effect from 1-4-2006. Once the aforesaid decision is taken and the doctrine of promissory estoppel is held to be applicable and invoked, the said certificate granting benefit of exemption for a period from 1-12-2005 to 30-11-2008 would remain in force, and therefore, even if the Sales Tax Act has been repealed, it would be saved by Section 100 of the newly substituted V.A.T. Act which provides for such contingency as it has been so worded elaborately providing for protection of right, title or interest and also has a reference to the notification issued under the erstwhile Sales Tax Act. Therefore, the certificate/notification which has been issued granting exemption for a period from 1-12-2005 to 30-11-2008 would remain in force and would be saved by Section 100 of the V.A.T. Act.

Therefore, the submissions as recorded hereinabove with reference to Section 6 of the General Clauses Act read with Section 21 of the said Act with much emphasis on the words "unless a different intention appears" by the learned Government Pleader has to be considered in background of the factual position and the provisions of law. As discussed hereinabove, the language used in Section 100 of the V.A.T. Act providing for repeal and saving clause has been elaborately worded. A bare perusal of Section 100 of the V.A.T. Act clearly suggests that such notifications and right, title, interest accrued or the liability incurred are sustained or saved. However, but for the impugned notifications dated 31-3-2006 at Anneuxure-I issued in exercise of Section 49(2) of the erstwhile Sales Tax Act, rescinding the earlier notifications granted under the same statute, the notifications by which exemptions have been granted would have remained in force for the full period even after the main statute, that is, the Sales Tax Act, has been repealed. In other words, even though, the Sales Tax Act has been repealed, the notification granting benefit of exemption under the Sales Tax Act, 1969 would have remained in force and could be given effect to in spite of such repeal of the Sales Tax Act as per Section 100 of the newly substituted V.A.T. Act providing for repeal and saving clause read with the notification as issued under the V.A.T. Act itself dated 1-4-2006 clarifying that the benefit of exemption would remain. Therefore, the impugned notifications rescinding the earlier benefit of exemption from the sales tax has been held to be bad in law and if it is allowed to remain in force or effective for its period from 1-12-2005 to 30-11-2008, it will not be inconsistent with the newly substituted V.A.T. Act.

However, it is interlinked inasmuch as, as discussed hereinabove, once the doctrine of promissory estoppel is invoked and held to be applicable or attracted, the impugned Notifications at Annexure-I, by which the earlier certificate granting benefit of exemption has been rescinded, is held to be bad and is set aside, the notification granting benefit of exemption for a period from 1-12-2005 to 30-11-2008 would remain in force. Therefore, once the notification is held to be operative during its full tenure, that is, from 1-12-2005 to 30-11-2008, during which the erstwhile Sales Tax Act has been repealed and the newly substituted V.A.T. Act has been brought into force, the said notifications would be saved in view of the provisions of Section 100 of the V.A.T. Act and to that extent Section 100 of the V.A.T. would also apply.

A useful reference can be made to the observations of the Hon''ble Apex Court in the case of Union of India (UOI) and Another Vs. Parameswaran Match Works and Others, which has a reference to the grant of benefit of concession from the payment of duty under Central Excise Rules which has again a reference to the discretion for grant of exemption from payment of duty under the Act as well as the Central Excise Rules, 1944. The Hon''ble Apex Court has made an observation as follows:

The concessional rate of duty can be availed of only by those who satisfy the conditions which have been laid down under the notification. The respondent was not a manufacturer before September 4, 1967, as it had applied for licence only on September 5, 1967 and it could not have made a declaration before September 4, 1967, that its total clearance for the financial year 1967-1968 is not estimated to exceed 75 million matches. In the matter of granting concession or exemption from tax, the Government has a wide latitude of discretion. It need not give exemption or concession to everyone in order that it may grant the same to some. As we said, the object of granting the concessional rate of duty was to protect the smaller units in the industry from the competition by the larger ones and that object would have been frustrated if, by adopting the device of fragmentation, the larger units could become the ultimate beneficiaries of the bounty.

This is precisely which is required to be focused as the benefits are granted to other industries or industrial units set up by the industrial groups or the companies. Therefore, by such device of fragmentation, or in the guise of eliminating certain entries from the list under the newly substituted V.A.T. Act, and thereby, denying the benefit of exemption to the petitioners would, in fact, run counter to the very object and purpose of the statute enacted for promotion and development of the khadi and village industries and also rural employment and the development of industries in the rural areas.

As discussed above, therefore it, if it is required to be considered in light of the Directive Principles with regard to transformation of the society or the economic developmant, then also it would be inconsistent with objects and reasons of the Act. It is required to be mentioned that in the changing scenario of globalization and the economic development, on one hand, Special Economic Zones are sought to be created to provide benefits for encouragement and development of the industries by providing various concessions, exemptions and other benefits, and on the other hand, the khadi and village industries which have been set up under the aforesaid statues and which have been getting the benefit of exemption throughout are now sought to be deprived of similar exemption or the benefit which will affect their competitiveness and by depriving such benefit, it will give a blow to their existence which in turn will frustrate the very object of the aforesaid statutes like K.V.I.C. Act.

As observed in the aforesaid judgment of the Hon''ble Apex Court in the case of Union of India and Anr. v. Parameswaran Match Works (supra), on the basis of which, subsequently, as observed in the judgment of the Hon''ble Apex Court in the case of Superintendent of Central Excise and Anr. v. Ayyangar Match Works reported in AIR 1976 SC 1003, referring to the functions of the Commission under the K.V.I.C. Act, it was observed that the Commission can recommend village industries for exemption under the notification for the benefit of exemption under the excise law. It is required to be appreciated that as observed in the aforesaid judgment reported in M/s. Parameswaran Match Works (supra), referring to the rule under the Central Excise Rules, 1944, the power to authorise exemption from the duty in such a case was very much there, but it was only the failure to exercise such power which led to the litigation and the Hon''ble Apex Court has observed that the K.V.I.C. could take up such issue for the purpose of availing such benefit.

In the same way, we are of the opinion that a similar course of action has to be followed u/s 15 of the K.V.I.C. Act. The petitioner may make a representation directly or through the Commission under the K.V.I.C. Act or the Board for issuance of such exemption under the V.A.T. Act inasmuch as there is already a provision for exercise of such discretion for grant of exemption under the newly substituted V.A.T. Act.

Therefore, in light of the discussion made hereinabove, the present petitions are hereby allowed partly. Prayer in terms of Para 7(c) in Special Civil Application No. 23720 of 2006 is granted. The impugned Notifications dated 31-3-2006, by which the earlier Notifications dated 29th April, 1970 & 1st April, 1992 have been rescinded, are hereby quashed and set aside in all these petitions and the original certificate at Annexure-G granting exemption for the period from 1-12-2005 to 30-11-2008 would remain in force till it expires.

However, the rest of the prayers regarding issuance of Writ of mandamus or writ in the nature of mandamus directing the respondents to grant exemption or to make available to the petitioners the exemption under the newly substituted V.A.T. Act, and also seeking prayer to grant exemption to the industries of the petitioners under the provisions of the V.A.T. Act from the date of coming into force of the V.A.T. Act, cannot be granted, nor any such prayer with regard to extension of benefit granted under Entry 95 or Entry 74 of the Schedule of the Sales Tax Act to be made applicable to the V.A.T. Act could be granted.

However, as the issue regarding grant of benefit of exemption under the newly substituted V.A.T. Act would be either a legislative function by issuance of notification in exercise of power conferred under the statute, or it would be a matter of policy to be decided by the respondent-Government as to how the benefit of exemption should be extended, for which, while substituting the V.A.T. Act, the entries have been deleted and some of the entries are specified, it may not be proper for this Court to issue directions granting the reliefs as prayed for regarding the exemption under the newly substituted V.A.T. Act. However, it will be open for the petitioners to apply to the respondent-Government by making a representation highlighting the fact that the industries are established under the K.V.I.C. Act and also the new scheme also has the same object of development, and therefore, the core idea remains the same for which the benefit of exemption granted earlier should also continue and it will be for the respondent-Government to decide it afresh in accordance with law.

Rule is made absolute accordingly to the above extent with no order as to costs.

In view of disposal of the main petitions, the Civil Applications would not survive and they are disposed of accordingly.

Registry is directed to keep a copy of this order in each matter.

On pronouncement of the judgment, Mr. Dipen Desai, learned A.G.P., asked for stay against the judgment pronounced today. On the other hand, learned Advocate Mr. Mehd and learned Advocate Mr. J.P. Shah appearing for the petitioners have submitted that necessary directions may be issued to the State Government to grant the refund of the tax which has been paid by some of the petitioners as a result of cancellation of the certificate.

Having regard to the facts and circumstance of the case, the request for stay made by learned A.G.P. Mr. Desai is hereby rejected and the State Government is hereby directed to grant the refund to the eligible petitioners within 30 days from today.